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Wow, I'm glad I asked. Although many of my long/shorts are correlated, like you said anything can happen. I don't think I would be happy if IB started willy-nilly liquidating positions. I guess I'll add more cash or unwind some positions. BTW, as I understand it the cash from the short...

I know very little about margin and I am wondering if I am pushing any limits in my IB account. Using similar ratios to my account here is a representation of my balances: Account value 10,000 Long stk = 13,000 Short stk= 12,000 Excess liquidity= 2,800 Given that IB says I have 28%...

Thanks dinn,. One more question, I get the feeling that this capability may depend on the stks traded. At least the IB warning message seems to imply that some stk combos are supported and some are not. I have tried several stk pairs and none work. Are you doing several different stk pairs...

Are you sure that these stk-to-stk combo orders are working? That is, have you actually had executions? On my computer it looks like the order has placed, but it never executes. Also, it does not show on the pending page. Don

Last week the IB stock vs. stock combo orders stopped working altogether. IB told me that they are no-longer supporting this type of combo order at-all. When I told them that their notice explicitly said the orders would be supported (although not guaranteed) they acknowledged that, but still...

IB recently sent a notice saying that stock vs stock combo orders will not be guaranteed. Other types of combos are still guaranteed, e.g., stock vs option, but not stock vs stock. I'm guessing that IB got burned during the recent flash crash and has decided not to guarantee stk vs stk combos...

Spin, I guess my note was confusing. I was focused on the put-call parity question and I inadvertently ignored the ROI question. As far as ROI goes, I agree it can be misleading. However, in this case it suggests that the BP spread is superior and that sounds right to me. Don

Excellent question and I admit it puzzled me for a while. However, I think I can simplify the question which may lead to an answer.. A CC is the equivalent of a NP so your Bull Put Spread is equivalent to a CC plus the long $45 put. Since the cost of the $45 put is the same in both positions...

It's been a while, but as I recall put-call parity was apparently out of whack. The puts were much more expensive than the calls. So reversion to the mean would benefit the short put holder. I think puts were expensive because MM's need to hedge long puts with short stock and that was very...

It's been a while, but as I recall put-call parity was apparently out of whack. The puts were much more expensive than the calls. So reversion to the mean would benefit the short put holder. I think puts were expensive because MM's need to hedge long puts with short stock and that was very...

I agree that IB waits until the limit price is slightly exceeded before it executes. Although in fast moving markets, like at the open, the price must be exceeded by a considerable amount before the order executes. However, the alternative of legging-in in a fast moving market also has...

I use stock/stock combos all the time. Try dragging the stocks from the trading window into the Combo window. Don

IB has this capability it's called a combo order. Don

Walt, my experience has been similar to yours . That is, profits were much higher earlier in the year than they have been recently. Judging from the lower volume of messages on this thread, I would guess that many other pair traders have experienced a similar drop in profits. The reason...

Yes, Interactive Brokers has such a capability. You can use their combo order to define your pairs with appropriate ratios and then click transmit to submit it. Limit, market, etc types of orders are supported. Works well, I use it frequently. Don

I've done a few pair trades using DITM options with some success. I use DITM options as they seem to be a good substitute for long/short stock if IV is not too high and liquidity is good. The main reason I use options is to enable pairs trading in an IRA where you cannot short stock...

Jonny, my tools say that these two stocks have poor correlation. Do your tools say the same? Don

No, assuming you mean the difference between the two stock prices (I don't use Pairtrade software). Actually the combo price can be confusing especially if you ratio your quantities which I think is typical. Play with the combo order and you should be able to get the hang of it. It can be...

Yup, IB's Combo Trader handles odd lots just fine. I do it all the time. Don

Maybe I don't understand you, but the combo order does let you set a price for the combo, not for each leg as you stated. Of course you need to do the math to convert your ratio price to the equivalent combo price. I don't setup my sell orders by using a projected sell ratio, but I would not...