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high frequency trading for options
Posted: November 4th, 2009, 2:02 am
by OPTION88
HiCould anyone explain how to make money by quoting bid ask price ???Is there any concept to do this??Or any other reference for high frequency trading concept in options or futures market.Many thanks@@@
high frequency trading for options
Posted: December 10th, 2009, 9:12 am
by QUEST
There are quite a few high frequency electronic market makers.The basic idea is to spot relatively cheap/rich options (lining-up the skew) and make spread bets accordingly.You need very low-latency set-up though.
high frequency trading for options
Posted: December 12th, 2009, 7:49 pm
by Errrb
"Interactive Brokers", Citadel and few others are running huge high frequency option market making operations. Their annual PnL used to be around few hundred million. This space also became extremely crowded recently btw, I was told that options spreads became narrow making it harder to make money. Typical high frequency market making is trying to get bid-ask spread on an option fill, delta hedging the book using the cheapest hedge (it could be stock strongly correlated with the option underlying in the same sector for example). The biggest risks are to loose money to people with "inside" information.