Sell options execution

ironchef · Jan 28, 2020

FSU said:
Typically I will start with a 1 lot routed to the CBOE. I have found the generally they will give me the best fills. Say a call option is quoted at 1-2. I wouldn't assume the mid point is fair price, I would first look at the strikes around it. For example if the strike just below is quoted 1-1.6, you would know that the mid price of your strike is too high. If this is the case, and I wanted to buy the option, I would first put in a 1.10 bid and wait a couple of seconds then cancel. I would then go up slowly until filled
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Great comments. I learned something new from you.

I usually looked at IV at the strike and those above and below to gauge if it is miss-priced.

Doobs789 · Jan 28, 2020

dmgi said:
Good day

I usually sell calls on high volatility stocks and sometimes i see that some orders executed near the theoretical price but in that moment bid and ask are quite different.

Like bid/(my)ask 1.0/2.0 theo val 1.5 and executed on 1.6
I know that cboe route has a possibility to place hidden orders but i suppose that not every route support these kind of orders

Could you help with it and tell how i can catch these trades? maybe i should place price a little bit closer to theoretical price or maybe there are some limits on spreads

Thanks
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So you attempted to sell at 1.5, and it filled at 1.6? Congrats, you filled .10 better than quoted mid. What are you complaining about?

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Sell options execution

ironchef

Doobs789