I checked the various SPDR ETFs for suitability for applying the spread trades that I am looking at using and only one, Energy, works. It has penny option pricing and enough interest and volume OTM to be able to produce some credit in the spreads, not a lot though.
All the rest, the primaries anyway (utilities, financial, consumer, materials etc) have very little OTM interest.
Time to review the options playbook and see if another strategy might be suitable for these types of options. I am thinking along the lines of a straddle perhaps, something non-directional that can use ATM or slightly OTM options for short to medium term trades...I prefer credit trades but I will not discount other styles either.
Jeff.
Questrade, My direct access discount broker.
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ReplyDeleteKey benchmark may extend gain in early trade on rise in most of Asian markets. Markets are in consolidation mode and a choppy range, as they attempted to digest the gains of the past two days. However some profit taking at higher levels cannot be ruled out after recent surge. The government will today unveil data on some wholesale price indices for the year through 21 November 2009 viz. the food price index, the primary articles index and the fuel price index.
According to data released by the NSE, in the last session, FIIs were sellers of index futures to the tune of Rs 137.61 crore while bought index options worth Rs 245.49 crore. They were net buyers of stock futures to the tune of Rs 87.22 crore and bought stock options worth Rs 56.29 crore.
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