SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Tech Stock Options
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Patrick Slevin who wrote (30672)12/9/1997 8:29:00 AM
From: Kevin  Read Replies (1) of 58727
 
>>>At the end, when you say that
"Instead what arbs do is buy a basket that REPRSENTS the SPX."
One other thing that is usually done is the 'weighting'of the basket, which is affected by Relative Strength. For example, if the program was designed to buy the cash and GE, XON, IBM were the highest RS stocks more buys would be targeted at those stocks and not at low RS stocks.<<<

Hi Patrick. I agree. Why not create a basket of stocks which should outperform the SPX if you can. I'd also like to note that I read the formulas on a site which I believe was originally provided by you. The formula is slightly different, but one should come up with the same results. The formula provided on that site should actually be easier to use, since many people do not have the SPX divisor available to them. Being that this is the ONLY response I've ever received on this post (and I've sent this post twice), I assume most people do not want to get into this much detail.

>>>At almost all exchanges, for almost all options an autoquote system exists which prices the options and is set to a b/a default with some parameters.<<<

I did not know this, and often wondered if the MMs were really 'that good' or if they had assitnace with their pricing. Very interesting.

>>>There is often a pit market better than the screen. Remember if the pit committment is say 100 contracts they might display a quote which represents their committment....a better quote might exist for 5's and 10's. This is the kind of activity that has evloved in instruments like SPX and DJX where the screen quotes are for a size of greater than 10 contracts.<<<

Thanks again. This would also help explain why there can sometimes be a decent sized discrepancy b/t quotes on various exchanges for an equity's options. I used to think the MM on the one exchange was in the bathroom and that's why his quote seemed 'off' <<<g>>>

Have a good one.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News