Part of the problem is that fewer individuals trade options and thus the 'impact', net-net , is lesser felt. The impact on investors in such spreads of old, in the days of USRX and PRST, etc. were the cause for tighter spreads, penny trading. Those spreads x the sheer volume was the loss to investors, atleast investors claimed and market maker refuted.
Additionally option exchanges are less connected. For example, we have to maintain seperate connections to each exchange to electronically route orders.
There is less liquidity which at the end of the day, is the justifications market makers believe they can hold such tight spreads. The supply and demand are relatively tight at any one point, thus the risk premium is less.
Options quotations are less detailed, as many investors dont understand the value of reviewing all exchanges upon which options trade to determine which exchange may have the price you want with the liquidity you desire. Quote systems usuallydo not easily break down options into their various exchanges.
They are trying and may get there one day but do not expect anything over night. Overall, if handled by a competent firm with your best interests as their primary objective, you should do just fine.
If anyone else has any questions I am happy to answer them in detail or provide whatever dialogue is warranted. it is amazing how far the markets have come. These boards, all of them including Yahoo's, etc. were flying 2 years ago. Today , they are as quiet as a mouse.
Regards,
Steve@yamner.com
yamner.com |
