Technology is about to do for trading options what it did for trading stocks -- make it cheap and easy.
...about time... they should also add... "and fairer for the investor"
"Ultimately, I think it's going to lower commission rates," says Scott Fullman, chief options strategist at Swiss American Securities, a Credit Suisse Group unit. "But I think it's going to take a bit of time."
That is great, but the best thing is...
The result is likely to be a price war like the one that drove online equity trading into the mainstream in the mid-1990s. At the same time, regulators are pushing the industry for better links between exchanges to make options prices clearer, which will only make options more attractive to small investors.
Because it will tighten the spreads between bid/ask prices, and will bring some discipline when, in spite of such prices being hit by the investor, the m/m moves them away.
This, particularly in far months (2 - 3 away), even on large cap equities, where said options are not as liquid as the current month/near month contracts |
