Am I fooling the algo's?

Amun Ra

Amun Ra

Maybe someone can shed light on this as to what is happening because it happens with a good 25%-40% of the way I do limit orders.

Today for instance...I'm trying to sell 10 options of KO. Bid is $5.30, ask is $5.45. I put a limit order to sell for $5.40 No execution as several minutes go by. Bid is still $5.30. I change my bid to $5.35 and it instantly executed for $5.41. The bid/ask is now $5.30/$5.50. This happens so often, that I get a better price when lowering my bid.

What is the logic in the algo's doing this?
 
Amun Ra said:
Maybe someone can shed light on this as to what is happening because it happens with a good 25%-40% of the way I do limit orders.

Today for instance...I'm trying to sell 10 options of KO. Bid is $5.30, ask is $5.45. I put a limit order to sell for $5.40 No execution as several minutes go by. Bid is still $5.30. I change my bid to $5.35 and it instantly executed for $5.41. The bid/ask is now $5.30/$5.50. This happens so often, that I get a better price when lowering my bid.

What is the logic in the algo's doing this?
More...

Someone probably had trigger if crossed condition set up. Did all ten of your contracts execute at 5.41 or is that the average?
 
Amun Ra said:
Maybe someone can shed light on this as to what is happening because it happens with a good 25%-40% of the way I do limit orders.

Today for instance...I'm trying to sell 10 options of KO. Bid is $5.30, ask is $5.45. I put a limit order to sell for $5.40 No execution as several minutes go by. Bid is still $5.30. I change my bid to $5.35 and it instantly executed for $5.41. The bid/ask is now $5.30/$5.50. This happens so often, that I get a better price when lowering my bid.

What is the logic in the algo's doing this?
More...
%%
Ive had that happen on semi liquid stuff also not options];
I think they have it programmed to avoid or discourage some numbers or they were lowering bids so you actually paid UP ON YOUR SECOND TRY. [as far as ask price going up on lower bid, well thats options/LOL/or anything with wide bid ask]
 
Amun Ra said:
I put a limit order to sell for $5.40 No execution as several minutes go by. Bid is still $5.30. I change my bid to $5.35 and it instantly executed for $5.41.
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I am confused ... are you lowering your ask from .40 to .35 and getting filled at .41?
 
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Amun Ra said:
Maybe someone can shed light on this as to what is happening because it happens with a good 25%-40% of the way I do limit orders.

Today for instance...I'm trying to sell 10 options of KO. Bid is $5.30, ask is $5.45. I put a limit order to sell for $5.40 No execution as several minutes go by. Bid is still $5.30. I change my bid to $5.35 and it instantly executed for $5.41. The bid/ask is now $5.30/$5.50. This happens so often, that I get a better price when lowering my bid.

What is the logic in the algo's doing this?
More...
I'm guessing that your order were auctioned. On what exchange did you get filled?
 
Amun Ra said:
I use ETrade so I don't know what exchange.
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Assuming you are referring to the US market, you know that there are 16 option exchanges. Each with their own set of trading rules and features.
Having said that and based on the few information you provided, I'd bet that your order was auctioned, and consequently, that your original order price was improved. That's the only explanation I can think of.
 
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