Options Prices on the ASX website

[Seneca60BC]

Hi

I have been basing my strategies on my options trades with the entry and exit prices based on what is displayed on the ASX web site - e.g.

Here is qantas

Will these same BID/ASK prices be reflected in my trading platform, e.g If i choose Interactive Brokers ?

In the COMMSEC screen the bid/ask is always 0 ( I do not have the trading permission to trade options in commsec though)

Cheers

 

[bean]

I am with E trade - the bids and offers come off when market closes.
But would have seen what you saw.
We can see market depth
We get calculator to do projections of prices
ACH Valuation Theoretical Value

Options Finder
Quotes & Market Depth
Options Centre
QANTAS FPO [QAN] (ASX:QAN) As of: 4/10/2008 6:50:00 AM
Last Price Today's Change Bid Ask Day High Day Low Volume
$3.110 -$.030 (-.96%) $.000 $.000 $3.150 $3.110 7,876,674

QAN81 - $3.25 PUT OPTION EXPIRING 30/10/2008
Today's Last Price Bid Ask Day High Day Low Volume OI ACH Valuation Theoretical Value
0.200 0.000 0.000 0.200 0.200 3 563 0.175 0.192

Buyers Sellers
Quantity Price # Price Quantity

Last 5 Trades
Price Quantity Time
0.000 0 -

 

[cutz]

Hi Seneca60BC

Out of curiosity I checked out BHP option prices on the ASX site and yes I noticed all the strikes have bid/offer prices and strangely enough they match up with the margin price, I know for sure there weren’t any bid/offer prices permanently up on the deep OTM series last Friday.

Out of the 2 sites i.e. Comsec and ASX I definitely would ignore the ASX site quoted prices.

Cutz.

 

[jackson8]

Hi

I have been basing my strategies on my options trades with the entry and exit prices based on what is displayed on the ASX web site - e.g.

Here is qantas

Will these same BID/ASK prices be reflected in my trading platform, e.g If i choose Interactive Brokers ?

In the COMMSEC screen the bid/ask is always 0 ( I do not have the trading permission to trade options in commsec though)

Cheers

asx quotes are as such

on a twenty minute time delay

if there is no actual ask or sell price asx will quote the theoretical price so there may not be or never will be a bid for that particular option

comsec during trading hours actuallly shows you the realtime depth the same as it shows depth for the underlying stock

there is very little liquidity in a lot of companys option series you will find more liquidity in bank and the larger resource stocks option series

asx provide a online calculator for produceing theoretical prices for any series

 

[Seneca60BC]

Hi

OK during the course of a normal trading day, the ASX prices do not reflect the actual prices quoted inside a trading platform like Etrade or Commsec? I ask because everytime I look at options in commsec, most like are showing BID/ASK as $0.00

Does that mean these options are not tradeable ?

Thanks!

 

[jackson8]

Hi

OK during the course of a normal trading day, the ASX prices do not reflect the actual prices quoted inside a trading platform like Etrade or Commsec? I ask because everytime I look at options in commsec, most like are showing BID/ASK as $0.00

Does that mean these options are not tradeable ?

Thanks!

as far as i know. as explain in earlier post the market makers are not under obligation to quote all and every option position available
private traders may create a position but a lot of these series just do not invoke interest in them so there is no liquidity

maybe because they do not have much volatility in the underlying share price their is no interest in opening a position in the options market and the premiums would be very low even if they did

if anyone with more experience would like to comment would be appreciated

 

[jackson8]

Hi

OK during the course of a normal trading day, the ASX prices do not reflect the actual prices quoted inside a trading platform like Etrade or Commsec? I ask because everytime I look at options in commsec, most like are showing BID/ASK as $0.00

Does that mean these options are not tradeable ?

Thanks!

just for comparison next trading day which i think is tuesday look at NAB compared to say QGC or AED

 

[Seneca60BC]

Ok thanks Jackson - I will take a closer look tomorrow in my commsec account to see which series are actually 'active'.

Cheers!

 

[skyQuake]

MM's recently have been quite skittish. Also many oppies are now so far out of the money that no-one trades in them anymore.

 

[Seneca60BC]

so whats the real benefit of trading options then - when you cant even get into a trade due to the illiquid nature of these suckers. I'm better off trading Warrants where there is always a bid/ask?

Cheers!

 

[cutz]

Hi

OK during the course of a normal trading day, the ASX prices do not reflect the actual prices quoted inside a trading platform like Etrade or Commsec? I ask because everytime I look at options in commsec, most like are showing BID/ASK as $0.00

Does that mean these options are not tradeable ?

Thanks!

Depending on what underlying you are looking out, when you put through an order on an option which is deep ITM or OTM therefore bid ask is showing nil, a MM will then show a spread.

Cutz.

 

[Seneca60BC]

OK - so anything that has an OPEN Interest of > 0 is a tradable option? correct?

 

[cutz]

I guess it is and a MM will give you a quote if its part of his obligation but with a very low open int. liquidity could be a massive problem and the spreads would be quite large therefore getting back out of the position will be costly.

cutz.

 

[skyQuake]

so whats the real benefit of trading options then - when you cant even get into a trade due to the illiquid nature of these suckers. I'm better off trading Warrants where there is always a bid/ask?

Cheers!

Warrants are a sure bet to failure. Its so ridiculously overpriced that its not funny.

 

[MongrelSun]

OK - so anything that has an OPEN Interest of > 0 is a tradable option? correct?

Any stikes that are listed by the MM are tradeable whether they have current OI or not. An options trading plan will normally stipulate a certain amout of OI (liquidity) is required or a trade is not considered. I currently use an OI of around 100 or I won't trade the strike.

By the way I believe the ASX data is delayed by 20 mins so what you are seeing on the site may be completely different to what is happening live. It would depend on what the share price has done in the 20 mins.

 

[Seneca60BC]

Hi Mon

Yes I believe the ASX price is delayed by 20 mins and thanks for the tip about taking the Open Interest into a trading plan.

Well I will keep a closer look on these this week -

thanks all.

 

[jackson8]

so whats the real benefit of trading options then - when you cant even get into a trade due to the illiquid nature of these suckers. I'm better off trading Warrants where there is always a bid/ask?

Cheers!

not many people would be able to buy 1000 shares of say nab at $26 but buying options allows you to take a stake in what would otherwise be an impossible purchase for a fraction of the price ..only drawback being that if trend goes against ...you may lose the lot

also options allow for trading a falling market as well as a rising one or even a stagnant market

seneca have you looked into taking the other side of the trade and selling options instead of buying

 

[cuttlefish]

I'd be using a trading platform to get live options prices if you are intending to trade them.
In relation to prices -for the liquid stocks with MM obligations to quote (e.g. BHP, RIO, big four banks etc.) the market makers show spreads pretty much continuously for the strikes that sit near the current price - usually around 3 to 5 strike prices for the current month and tend to do the same for the next month out. So the near ITM, ATM and OTM prices are all available.

For deeper OTMS and ITMS you can call your broker and ask them to request a spread - in stocks where they are obliged they will provide one - or if your software supports it you can request a spread via the software.

If you have real time depth then you will see the requested spread pop up on-screen for about 30 seconds or so then dissappear again. Sometimes if you put in a bid that is within the spread range they will keep the spread there and move it around as the underlying price changes (deeper itms lower gamma so they only move with significant price movements.). Also another way to get a spread is if you put in a 'sensible' bid you'll usually see one come up anyway.

If volatility rises you tend to see the spread width rise to reflect this and again you probably see the greatest proportional change in the otms as volatility rises and falls, but the speed of the spread change is quicker in the atm's as they are more sensitive to the shorter term movements in underlying price and volatility. What that can mean is that it can be difficult for you on the other side to take a volatility profit - ideally you need someone on the other side wanting to take a stop on a short volatility position.

It was very interesting seeing the lack of liquidity on the day of the short selling ban - it does demonstrate the level of reliance on MM's and they really can pull up stumps at any time (and you do sometimes see all spreads get pulled when there's a sharp large move in the underlying and return when volatility settles again).

Its also worth noting the the MM's spread may be no reflection of the current theoretical value of the option - particular for deeper otm's in times of higher volatility you'll probably pay a lot of IV and see it collapse pretty quickly if the underlying volatility falls. (as you'd expect as this is how the theory goes, but I think this is where the MM's do quite well when people jump in to buy deep otm's at high iv's in bulk looking for 'windfall gains' only to see delta move in their direction but volatility collapse leaving the option position a loss maker in spite of getting the delta right.).

I'm new to options as well so the comments above may be naive/ill informed.

 

[Seneca60BC]

Hi guys

Yea I dont like selling options at the moment, that inverted V shape on the pay off diagram make me shudder - I am just starting out at the moment and dont want to find myself in such a precarious situation.

Well after this afternoon, I have been thinking about a comment I read from a couple of people here and that was about trading the US market. I am now considering looking at this as a more viable option - but will still consider the Aussie market to begin with.

I am looking at buying at the money / in the money options with 3+ months to expiry. Yea, I looked at FGL and it was pretty much bone dry - so much for the options - mind the pun

Cheers!

 

[cutz]

Hi

When you say bone dry do you mean there's no open interest or no spreads ?
BTW if you used comsec for your first option trade you are entitled to use protrader at no cost.

Cutz.