On kind of a ho hum day I thought it would do to explain the array of trade tags that come courtesy of the option exchanges.?
I am seeing the need to explain these monikers after hosting the Odd Block (2 years) and Options Oddities (100+ shows so far) for the Options Insider media empire.? The listeners have questions and I will try to answer them.
For part one, please go here.
These definitions come from Livevol (r)?www.livevol.com ?and I will add my spin on each below:
IntermarketSweep: A trade resulting from an Intermarket Sweep Order Execution due to a better price found on another market.?
Translation:? This is new with electronic trading.? The firm trade execution engine is trying to grab liquidity anywhere it can find it.
Combo: Transaction represents the buying of a call and the selling of a put for the same underlying stock or index. Prefix appears solely for information; process as a regular transaction.?
Translation:? Similar to spread and straddle but letting the world know this is some kind of risk reversal or collar.? The combo can be on the same strike as well for a synthetic stock purchase or sale. ?Generally this trade is a long call and short put or long put and short call.
Cancel: Transaction is the last reported for the particular option contract and is now cancelled.?
Translation:? For whatever reason a trade that printed (consummated and place in the OPRA feed) is taken down and busted.? This is probably due to broker or customer error.
SoldLast: Refers to a trade that is reported late and the ‘Last Sale’ is reported as the price. The ‘Last Sale’ price represents the last price paid for an option during the trading day. It is usually an administrative message.
Translation:? This can happen with large manual orders where the trade is consummated in the pit but for whatever reason does not hit Time and Sales in a timely manner.? This is also a reason for seeing a large volume trade and not getting a fill since the transaction is not ?trading? there as a regular order.
Price Variation?is similar to “SoldLast.”? Essentially it occurs when an option trades goes up tied to stock at a different price, so the the option prices are adjusted.? The NBBO that’s reported with the “price variation” is unreliable, as the exchange either prints it late, or it’s tied to stock at a different price.?
Translation:? These trades are usually part of a package (options and stock) and the net debit or credit has to stay firm but the underlying price to create it moves around.? The trade is consummated and could hit the tape (ORPA feed, Time and Sales) in a late manner.
Buy Write: ?An option trade tied to stock on some ratio. ?For the options to trade, a block of stock is crossed from customer to trader.
Translation: ?This is an option block trading with stock. ?Nowadays stock and options on delta neutral ratios are common so an option trade might not be what it seems.
There you have it.? A rundown of the trade tags and some of the real reasons why options trade at prices that customer might not be able to get. ?The gist is that option trades can go up but the intent is unclear since it might be matched with other options or stock. If you do not get a fill, there is generally a pretty good reason.