|
PureBytes Links
Trading Reference Links
|
At 5:52 PM -0500 2/16/99, Brian Massey wrote:
>A friend asked me the other day about day trading OEX options using her
>system. Her system appears sound but we were unsure of slippage and
>brokerage fees. She needed to know what a reasonable OEX day trade commish
>is, and what other types of problems she could expect day trading trading
>OEX options. Since I haven't done a lot with the OEX, I couldn't give her
>an answer but I told her I would pass along the question to the list.
>
>Could someone provide a run down on what a reasonable day trade commish is
>for OEX and typical slippage. Any other advice with regards to your
>experience trading the OEX would be greatly appreciated.
I trade OEX options through Fidelity's "frequent trader" (Spartan) program
on-line. Commissions for Index Options are $20 + 1.75/contract.
I use BMI real-time quotes and use market orders. Once you place the order
on-line, Fidelity has a screen to allow you to review the market order
after entering it with the quoted price. If you then "Place the Order",
they report a fill on the "Orders" screen within a 5 to 10 seconds at that
price (unless you wait several minutes to place the order).
Slippage is hard to estimate since the last trade reported by BMI can be
minutes old and their bid/ask price is lousy. So I usually plot the price
of the option and of the OEX cash index and estimate the option price from
the changes in the OEX cash index. I am usually watching the OEX cash ticks
and place the order as the price reaches a local top or bottom and starts
to change direction. This works pretty well. (I use a trading system to
give me buy/sell signals but then decide exactly when to place the trade
while watching the tube.)
If their Internet site is very busy, you can easily call their 800 number
to get off the trade quickly. This costs a little more but worth it if the
price is moving quickly. Fills for such verbal orders are reported on the
"Orders" screen within seconds so their manual system is well connected
with their on-line system.
Their on-line system was a bit slow until recently. It has been revised and
now seems much better.
Bob
|