Any Scoopers work at the CBOE or the Options Clearing Corp?

[Eldon]

The networking thread made me think of asking Scoopers for some help.  I'm not looking for a job at the CBOE or OCC, but rather, I'm hoping to get my hands on some data that either company would have (or potentially have).

I'm also hoping to ask some questions to someone who works there regarding the details of option listing/delisting decisions.

I know, I know.  Shot in the dark.  But contacting them directly has led to a dead end.  And I figure, hey, both firms are in Chicago, and MU is located in a northern Chicago suburb so...I'm sayin there's a chance.

[Tugg Speedman]

The networking thread made me think of asking Scoopers for some help.  I'm not looking for a job at the CBOE or OCC, but rather, I'm hoping to get my hands on some data that either company would have (or potentially have).

I'm also hoping to ask some questions to someone who works there regarding the details of option listing/delisting decisions.

I know, I know.  Shot in the dark.  But contacting them directly has led to a dead end.  And I figure, hey, both firms are in Chicago, and MU is located in a northern Chicago suburb so...I'm sayin there's a chance.

Explain this further.

[MU Fan in Connecticut]

I've met the Deputy Chief Of Staff For Education for the City of Chicago before.  He's the son of a  former longtime boss out here in Connecticut. 

[manny31]

I don't work at the CBOE or the OCC, but I do have a little experience with getting data from exchanges though.I imagine that you have already explored their websites, if not I would go that route. If your purpose for this data is an academic project those entities might be more likely to help. Aside from that, places like CBOE, CME group sell their data. Poke around the websites, if you don't see what you need for free give them a call... Good luck.

[Eldon]

Explain this further.

Where do I begin?

Just to be clear, by listing/delisting I mean the stocks that the options exchanges choose to list on their exchange.

In general, I'm curious about the listing process.  The nuts and bolts.  Of course, to some extent this is the "secret sauce" of the exchange so I'm not looking for the actual algorithm they use.  Actually, several academic papers have econometrically modeled this decision and these models perform quite well, but, alas, these models are not perfect.  Anyways.

Here are the specific questions that I have:
1) To what extent does the option listing committee consider short interest in the underlying stock?
2) To what extent does the committee consider the degree of "informed trading" in the underlying stock?

Let me elaborate on 2.  There are explicit measures of the "probability of informed trading" (called PIN for short).  I doubt that the options exchanges are aware of this measure, but it wouldn't completely shock me if they knew about it and took it into account when choosing to list options. 

But my question is more general than that.  Does the listing committee consider any measure or proxy of informed trading whatsoever, e.g., debt/equity ratio of the underlying firm?  Hell, it doesn't even have to be an explicit measure--does the committee talk at all about their market makers getting hammered by traders, i.e., trading against someone who is better informed?

Let me give you an example of a hypothetical conversation of the CBOE listing committee:
-Should we list options on 1-800-Flowers?
-The stock is volatile, liquid, and heavily traded in the underlying market, so yes.
-Ok fine, but who are the customers who will be buying these options?  Will our market maker(s) get slaughtered by trading these contracts?

Does a conversation like this ever happen?

Regarding the decision to delist a class of options, why would the exchange do it?  The obvious answer is that the costs outweigh the benefits.  But what exactly are those costs?

[Eldon]

I don't work at the CBOE or the OCC, but I do have a little experience with getting data from exchanges though.I imagine that you have already explored their websites, if not I would go that route. If your purpose for this data is an academic project those entities might be more likely to help. Aside from that, places like CBOE, CME group sell their data. Poke around the websites, if you don't see what you need for free give them a call... Good luck.

Thanks for the response. 

The data that I am looking for is not typical data per se.  I'm looking for the dates of option listing as well as the much-more-elusive dates of cross-listing by other options exchanges.  The thing is, option traders don't give a damn about that type of data, so it's hard to find.  The OCC website has this information, but it only goes back so far.  I've called/e-mailed the OCC as well as the CBOE and no luck.  I've done an archive search through the Wayback Machine and the CBOE used to have a running Excel file that kept track of all listings/cross-listings, but it is no longer available.

[manny31]

Sorry, I thought you were looking for open interest, settlements, etc. I don't know who you would necessarily speak with regarding the kind of information you want. Overall the short answer as far as metrics for listing and delisting is how much money an we make off fees. Exchanges largely don't give 2 poops about the market makers getting run over. If you don't like it don't trade is their usual response. I don't even think DPM's really exist anymore at the CBOE. There might be some concern if liquidity was a problem but I don't think liquidity as defined in today's world is a concern for the exchanges. Commodities exchanges even less so.

[Tugg Speedman]

Your question suggests listing is some sort of mechanical process.  I was under the impression they have a listing committee that made these decisions as hoc.

[Eldon]

Sorry, I thought you were looking for open interest, settlements, etc. I don't know who you would necessarily speak with regarding the kind of information you want. Overall the short answer as far as metrics for listing and delisting is how much money an we make off fees. Exchanges largely don't give 2 poops about the market makers getting run over. If you don't like it don't trade is their usual response. I don't even think DPM's really exist anymore at the CBOE. There might be some concern if liquidity was a problem but I don't think liquidity as defined in today's world is a concern for the exchanges. Commodities exchanges even less so.

I'll eventually shoot out some more e-mails, ask some colleagues, or even wander about on LinkedIn shooting random people messages.

The second bolded part surprises me.  To my knowledge, the CBOE still has DPMs trading many (most?) of the options.  Without the DPM, I don't know how trading would happen.  Of course, traders could trade with each other, but without a DPM, the trading would have to be primarly restricted to limit orders.

Anyways, thanks again for the response. 

[Eldon]

Your question suggests listing is some sort of mechanical process.  I was under the impression they have a listing committee that made these decisions as hoc.

They definitely have a listing committee.  And while I'm sure decisions are ad hoc, I'm not sure just how ad hoc they are.  I mean, on one hand, I doubt that the committee completely outsources the listing decision to a computer.  But, on the other hand, I doubt that the committee stays completely ignorant of the data when making a listing decision. 

And that's essentially my question: Does the committee consider "informed trading" when making a listing decision, regardless of the method of consideration, e.g., statistics or qualitative evidence?  In other words, regardless of how the committee makes its listing decisions (the decision can be econometrically modeled in either case), I want to know what those decisions are based on.

At the end of the day, I can throw a bunch of financial variables into the right-hand side of a regression and assess which variables/models are best, but I'd like to get confirmation (or not) from someone who actually has experience at an exchange.