No. You simply quote the spread and then put a limit order at the mid +/- a nickle or a dime then you are at the MM's mercy. I only leg into ES options.
Since last Thursday, when the S&P broke through 1250 and hit a low of 1245.34, the S&P is up roughly 41 points. Even Tuesdayâs massive decline from 1280 to 1260 failed to come close to that low, which was 81.36 points under the high we put in on May 8th. As a follow-up on that skew in volatility for puts versus calls, after our 1st half hour of trade the $1 out-the-money put is now at the June 1195 strike or 7% out-the-money, while the nearest call strike trading for $1 is the June 1320 strike, which is 2.6% out-the-money. This reflects a normalization of the pricing, as puts ALWAYS carry a premium to the calls. One explanation is that there are no natural sellers of puts, but millions of potential natural sellers of calls. The reason for that is simply that individuals, institutions, hedge funds and mutual funds own stocks and are thus in position to sell calls against their holdings with no additional margin. The miniscule percentage of shorts in the markets would be the only natural sellers of puts and they along with professional traders seem to have moved the skew between calls and puts back into a normalized equilibrium
KTM, Thanks... appreciate the info. We're definitely looking to use the increased (or decreased) depending how you view it... to help risk manage our positions. Do you use IB.... TS... or private broker? Any suggestions? Murray
The market is a real bee-ach huh... All glowing in the morning and when real trading started it bounced off resistance and moved lower. My opinion is that we are at the top of this upswing channel in the chart I put just above and I see 1265/70 in a few days if the market does not reverse again today.
I opened 20 SPX 1350/1360 July bear call spreads for a credit of $0.70.Even with fed meeting and a cause for a pause, i doubt we will reach 1350 in 6 weeks.