[TheOptionClub.com] Re: Newbie question

 

Thank you Chris, Nick, and Jack! So, I have noticed that sometimes the mid prices for verticals get out of line with their peers making it either over or under priced. Is the a "phantom trade" in that when I try to fill that, the market maker takes one look and rolls his eyes? Also, the Bid/Ask spread is HUGE on verticals, I'm assuming because it's the Bid on one option and the Ask on the other. Is it actually reasonable to believe that someone will sell me a vertical that is $1.00/$3.60 at the mid of $2.30 or even $2.40? BTW, this is on the SPX at contracts with over 30k OI and 800+ volume for the day.

I feel like it is "possible" only because yesterday an ATM call spread was $2.40 when it's peers were $2.85 and $2.80. Then a transaction took place and it dropped to $2.30. It stayed this way for nearly half an hour. But almost that whole time I had a buy order (with a limit at $2.40) and it never got filled.

Thanks for your help, guys! I feel like I'm the only person in this whole part of the country who is interested in trading. Does anyone live within even a few hours of Vicksburg, MS?

Thanks again!
Sam

--- In OptionClub@yahoogroups.com, "TheOptionClub" <chris@...> wrote:
>
> Sam,
>
> TOS has an awesome paper trading feature and while it is based upon
> actual market data you have to keep in mind that it is a market
> simulation and is not real. My understanding is that PaperMoney is set
> up to fill at the "mark" price. The "mark" price is the mid-point
> between the bid and the ask. In highly liquid markets you might get
> filled at the mark, but usually you have to give a bit more in the "real
> world."
>
> The bottom line is that as good as TOS' PaperMoney may be, it does not
> actually find someone to take the other side of your pretend trade and
> is only simulating the fills. The "real world" requires that there be
> someone on the other side of your trade, even if it is only a market
> maker. The market maker is nobody's fool and expects to get paid for
> their trouble. They will probably want a bit more than the mid-price,
> or the "mark," affords them.
>
> Christopher Smith
> TheOptionClub.com
>
> --- In OptionClub@yahoogroups.com, "iflyadesk" <sambharris@> wrote:
> >
> > Hello everyone. My name is Sam and I've been lurking for a few weeks
> and learning a lot from everyone's posts. I have been paper trading on
> thinkorswim and have been doing quite well, so I decided to try it with
> real money. However, I've been having a great deal of difficulty
> getting my vertical orders filled at market. In TOS paper money, if the
> volume is 1000+ for the day, I can fill an order in seconds, but with
> real money, several minutes go by without filling. My strategy is
> somewhat dependent on nearby prices, so by then the market has changed
> and I have to cancel. Any ideas on why this is happening? Is this
> normal for the "real world"?
> >
> > Thanks!
> > Sam
> >
>

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