I was able to successfully ('til now) execute a WOTM spread trade with the QQQ’s.
I am now trying to construct one with DJIA. Which instrument should I use (like the QQQ) where the spreads are just pennies?
Any help would be appreciated, Pay (Gil)
The only reason you find penny spreads for QQQQ options is because of the CBOE penny pilot program in which QQQQ is included. See:
http://www.cboe.com/penny/default.aspx
As you can see it applies to only a handful of markets, and DIA is not included.
For your own account, you might be interested in IB’s penny-priced options program, in which an internal matching mechanism matches buy and sell orders in pennies for IB accounts. http://www.interactivebrokers.com/en/penny/index.php?ib_entity=llc
But these penny quotes are probably limited to IB, and won’t show up in the C2 quotefeed.
Wow! great advantage for QQQQ traders (like most stocks since decimalization)
Thx ST…options are different.
I like the djx bto 139 sto 138 for a .25 credit spread. Did you know I am looking at .10 on EACH spread.
Trade may likely pan out…but is pushing it, a bit.
Let’s see qqqq was a penny on .67 and .32.
on QQQ
.01/.495 (avg) = .0202
on DJX is about
.1/1.15 (avg) = .0870 on each leg (i should say ‘arm’)
What am I to do???
BTW: Does C2 give live quote before placing market trade?
For spreads it is best to trade them as a one spread (not two separate legs), and you use a limit price which is well inside the Buy/Ask spread, giving the market maker a small margin from the midpoint. The amount of margin required depends on the market, and how expensive the position is, but it will be much less than the margin per leg.
BTW even for single positions, if the buy/ask spread is very large, you can often get them inside the buy/ask spread with a limit order. Good luck.
Thx David,
C2 requires separate orders?
I will try the limit.
Gilbert
