USO options

FSU · May 4, 2020

stevenpaul said:
IB was very certain it would be impossible to place any initiating orders. Only liquidating orders would be accepted. FSU, if you can expend new capital on USO1 options, would be please buy mine off of me at a fair price? Because the market in these options seems unregulated. As soon as options opened for trading the day after the reverse split, USO1 Call options traded for $ 0.01 when they were $.35 the preceding trading day, and on an up day in USO1. As the day progressed, the calls put in a bit of a bid at $.10, still way below their counterparts in USO.

I asked IB who would be taking the other side of my sell order in these calls. His response was that it was no market maker, just holders of short positions in these calls. Until they are thin on margin, they can just set the bid price to anything they want.

I think this is a terrible scam on the part of USO (or is it the OCC). Overnight, these options went from being very liquid to nearly illiquid, but not because this is a thin market. No one can initiate new orders to buy or short these options! Only the pool of those with existing open interest can trade to each other. I think it's amazing that this is allowed. How do I sue?
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I see a lot of volume and fairly tight markets in these options. May 8th 2.5 strike puts showing .01 wide market .14-.15 650 traded. Even going out to Jan 21, markets are fairly tight with a lot of volume.

I don't think the information IB is giving you is correct. You have tight markets, 1000 up, these are market makers, not random customers closing their position.

You may not like the value of your options, but the markets seem very reasonable to me.

Which options do you have?

Cabin111 · May 4, 2020

stevenpaul said:
IB was very certain it would be impossible to place any initiating orders. Only liquidating orders would be accepted. FSU, if you can expend new capital on USO1 options, would be please buy mine off of me at a fair price? Because the market in these options seems unregulated. As soon as options opened for trading the day after the reverse split, USO1 Call options traded for $ 0.01 when they were $.35 the preceding trading day, and on an up day in USO1. As the day progressed, the calls put in a bit of a bid at $.10, still way below their counterparts in USO.

I asked IB who would be taking the other side of my sell order in these calls. His response was that it was no market maker, just holders of short positions in these calls. Until they are thin on margin, they can just set the bid price to anything they want.

I think this is a terrible scam on the part of USO (or is it the OCC). Overnight, these options went from being very liquid to nearly illiquid, but not because this is a thin market. No one can initiate new orders to buy or short these options! Only the pool of those with existing open interest can trade to each other. I think it's amazing that this is allowed. How do I sue?
More...

Maybe consult the other partners in the master limited partnership??

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USO options

FSU

Cabin111