Look how long the SSF exchanges had to keep postponing and delaying. Eventually it did finally come to be. Take the time during these postponements of the BOX to get yourself prepared to be in there at the beginning, whenever that may ultimately be. p.s. FOIA = Freedom Of Information Act p.p.s. aspects of the FOIA may be jeopardized by the pending USA PATRIOT Act II.
I read a few days ago that Michael Oxley, chairman of the House Financial Services Committee, (rep from Ohio) is busting the balls of the SEC over a similar issue. Perhaps an email and/or letter to him might result in some additional scrutiny. Michael G. Oxley Ohio-4th, Republican 2308 Rayburn HOB Washington, DC 20515-3504 Phone: (202) 225-2676 His contact page URL: http://oxley.house.gov/contact.asp
How is the Box better than the ISE? I think it will be worse for people sitting on the bid or the offer as the market maker can dime you. The Eurex exchange will probably be the best as it has time priority with limited market maker priveliges. They should go down to pennies as well.
I'm definitely not taking up for the options MM's, but the customer does have one edge that the members do not. The customers don't have to stand there all day and trade with anyone that puts up an order. Traveler
It's why I would never go back on an option floor ever again. On the CBOE, you were exepcted to trade every piece of garbage if one of the senior people in the pits opened their mouth. I would say that at least half of the people there couldn't make a market on their own. They just raised their hands and went along. Their view was to get the berries you had to trade the crap. Mine was just to trade the berries. Yeah sure, they made money in the system and I didn't. The whole thing drove me nuts and caused a lot of conflict between me and others in the pits I traded. The concept of "go along to get along" doesn't resonate with me at all. Electronic trading is my nervana, as it allows me to find the edge on my terms and not be dictated to by the BBO, the DPM or the crowd. [/rant] It is nice to see I still have some arrogance left in me, much of which was deleted in the proof read before posting. I don't want to seem like to big of an idiot.
I agree with one caveat, if your sending a pick off order don't be pissed if they fade. MMs have an obligation to make fair and orderly two sided markets, don't be mad at him if the stock tanks 1/2 a point on a tick and the OBO is slow to get rid of a bid in the book. If the situation changes, their markets change and some times things are slow to adjust. They shouldn't be held to an infallable standard. As far as rights and priviledges go, I completely agree. My posts was to illustrate that these things people complain about are minor details in the larger mix of things. They aren't illegal nor criminal as people want to believe. There are better ways to organize option markets than currently exists. I began trading in Europe where the dynamics are much different. It's the way I learned to trade and goes to the heart of the matter in the rant above. I have a different view than what most floor trader here in th U.S. have. In effect, I learned how to make markets in the free for all and came back to trade in the old boys club of the CBOE. I couldn't adjust. The funny thing is we never honored quotes if we weren't there. There was rule, of course, to be five up, but it ignored by all. Agreed, I think this is due to their organizational structure. Actions are taken to preserve profit margins of the membership and not to increase order flow. I prefer the latter. How many exchanges can be supported? We've know of these issues for years and yet the incumbant players have done little. Isn't it kind of odd how the rest of the world threw out the old way and the U.S. exchanges are still clingng to the past. Yeah I was more or less talking out of my ass on this one. They could in a couple of strikes in a couple of stocks. Nice tight liquid markets are the result of many players having different views. In a five/ten cent wide market, it is inevitable one side is shitty. The guy on the shitty side thinks it is you who is the fool. This past week, I was on a ten cent wide market in CSCO, 20 up. I would have been more but ran into margin limitations. Plenty of free money out there.
i think what a lot of novice forget about options is that they are a temporal contingent claim on a persistent asset. i don't think a novice should even touch options except as a hedge against an existing portfolio, with asymetrical returns (limited loss, unlimited upside). i've seen some interesting uses for options. such as selling puts for a security you want to own fundamentally at a certain price. if it drops to that price you get into that purchase price. if not, the option expires worthless and you pocket the premium. in my opinion, option trading is trading the distribution of the underlying security of which the obvious is trading volatility.
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