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What is the legal spread?

Shorting EDV is your best choice because it contains long term zero coupon bonds. If you go with TBT and PST you will have to be long on them.

Short EDV.

In my opinion this is nothing to do with the market orders. Even marker orders have to be fair. You trade with market makers. Their offered prices should be reasonably near fair value. Somebody just might have made (20-5)/5 = 300% profit ( given that $5 was options fair value) in few seconds by...

Correct.

This is strange. How do you know what was the next price? Even with the market order option's price should be reasonably near it's fair price. So your case depends on the stock price at the time.

In step #3 after subtracting the short stock positions in case you've got a negative cash balance IB will charge you interest on this negative balance.

Interactive brokers does charge the margin interest on the short stock positions: http://individuals.interactivebrokers.com/en/accounts/fees/interestMethods.php?ib_entity=llc Read step 3. If your short position was initially covered by cash but the stock goes against you it means you...

I would like to know what broker does not charge interest on short sales. Any retail broker I know would charge you margin interest. Can you recommend one that does not?

Margin account is not enough. The OP has probably the margin account. Some stocks are hard to borrow. I consider ThinkOrSwim as the most friendly broker I am aware of for shorting stocks. Remember that broker is going to charge you margin interest if you hold a short stock overnight. For...

MTE, do you trade ICs exclusively with european style options?

One more clarification: Your lost about 100% of your IC risk capital last year, right?

Would your loss be like about 100% of your IC margin? Do I understand you correctly?

I mean 100% of my IC margin not of my total account. I guess you mean the same thing: 15-20% of IC margin, right?

Maybe it's 15-20% profit after commisions.

That makes sense because my backtested results are about 100% profit in a good year and 100% loss in a bad year. I guess it all depends on the width of the spread. My spreads are very wide. And I don't do legging in. Last year was about 100% loss. Thank you for your reply.

Why not? How many trading platforms do they need to maintain?

It's much better for my purposes. So much better than I don't consider even IB as a second alternative for my strategies.

The big question is what exactly they are buying: ToS Trading Platform or customer base. I hope it's platform.

Backtesting.