OTC futures trading

Discussion in 'Professional Trading' started by heech, Feb 8, 2010.

  1. heech


    Hi there,

    I've learned a lot in the last 6-12 months... I've taken various paths in terms of technology/instruments/exchanges that have taken me far above/beyond what I expected to be doing initially. End result, I am now trading a strategy that I'm pretty excited about (so far).

    But I'm really looking to expand my knowledge. Specifically, I'm having a hard time getting satisfactory fills with some of my exchange-traded option on futures. I have some reasonably complicated option strategies.

    I'd like to learn more about getting trades filled on an OTC basis. I'm looking at everything from NYMEX to ICE softs. Monthly volume is around 500-1000 option contracts. The "difficulty" with trading on the exchange (either in the pit or electronically), is that I some times have options at 5-20 different strikes I would like to fill in a single combo/package order. Legging in is extremely expensive, as in many instruments the locals quickly move the market as I start placing trades.

    Can someone give me a quick primer? Who do I talk to in order to get OTC quotes, or place OTC trades? My FCM? Or?
  2. tomk96


    if i understand you correctly, you want to trade OTC options instead of exchange listed options?

    those markets are wider and you would need to get a quote from multiple banks every time you wanted to trade. you also are not likely trading big enough that they will create the option for you.

    get a number for a pit broker or however you would need to do it and price it as a package as opposed to individual legs. or trade parts in spreads that reduce the delta and maybe the vega.