Automated Options Trading

jcheak · May 10, 2008

Maybe you can trade USD options on other exchanges outside the US. I think the nordic exchanges have it.

dr_sean · May 12, 2008

Quote from bmferguson:

Thanks Wayne, good info to know.

The rules must be different in Canada, because I've been told by a vendor about a bank up here that's apparently got an automated platform for the Bourse de Montreal. I had assumed that automation in options was a no-brainer, since the bank up here apparently has a platform, automation in other derivatives has been around for a LONG time, and the U.S. is generally way ahead of Canada in terms of trading.

Do you mean the bank is using it / proprietary? Or they are letting customers use it?

the bank is probably an exchange member, so they can use it, Canada or no.

Thanks for those laws Wayne those helped a lot.

Kamelia · May 14, 2008

Quote from bmferguson:

What are some of the platforms that you've used for automated options trading?

thinkorswim, I guess.

This platform has a wide range of option strategies (verticals, calendars, butterflies, condors, etc.) and supports a greate number of algorithmic orders. You can customize the platform to route them in automatic mode according to multiple parameters. The algorithms include sequences of orders and order groups when the first order or group triggers or cancels another one with ability to compute order prices.

nitro · May 14, 2008

Quote from bmferguson:

What are some of the platforms that you've used for automated options trading? Has anyone used Orc as part of their platform?

ORC, Actant, Edge Specialist, MicroHedge, ICS, proprietary software.

Yes, I have used and programmed ORC.

nitro

dr_sean · May 14, 2008

Quote from Kamelia:

thinkorswim, I guess.

This platform has a wide range of option strategies (verticals, calendars, butterflies, condors, etc.) and supports a greate number of algorithmic orders. You can customize the platform to route them in automatic mode according to multiple parameters. The algorithms include sequences of orders and order groups when the first order or group triggers or cancels another one with ability to compute order prices.

I run TOS and have not figured out much of how to do automatic orders. I mean there are quite a lot of conditions you can set with the typical order entry window, but are you doing something beyond that?

I have messed a lot with the ThinkStrategies programming in the Charts window but my understanding is that's only for backtesting and analyzing, and that you cannot stream orders from the Strategies writer to the market.

How are you going about programmed /algo trading on TOS? Not necessarily what your strategy is (i don't care about that) so much as where are you writing the code? / etc.

Thanks in advance,

Sean

luchini · Jun 22, 2008

IB has a partner in Greenwich CT that actually did automated options trading. They had what they called "Pilots" that would monitor the computers trades to make sure that it wasn't doing anything off the wall. I interviewed with them but didn't have much enthusiasim for the position since I would've mostly been doing perl scripting....

They may have been trading on foreign exchanges; that being said I read somewhere recently that the majority of automated trading is done on options and futures markets because there are more easily describable rules in those markets

JSOP · Jul 4, 2017

Wayne Gibbous said:
IMPORTANT INFORMATION ABOUT U.S. OPTION EXCHANGE RULES

3. It is a violation of U.S. option exchange rules to transmit orders that have been created and communicated electronically without any manual intervention. Customers using IBâs Trader Workstation therefore are required to click a mouse, hit a key, or do some other manual action to transmit option orders. Customers with a Computer-to-Computer Interface or who use the IB Application Programming Interface (API) represent that they will not allow orders to be created and transmitted automatically without manual intervention.

That is a BULLCRAP law, the most BULLCRAP that I have ever heard!! What about those HFT trading? They do that all the time. How come they are allowed?

Option_Attack · Jul 9, 2017

Hopefully someone knows for sure, but I believe that rule is no longer in force.

And in any case I used an auto trading option system, through IB's API, for years and never encountered a problem.

Good trading to all.

JSOP said:
That is a BULLCRAP law, the most BULLCRAP that I have ever heard!! What about those HFT trading? They do that all the time. How come they are allowed?

JSOP · Jul 10, 2017

Option_Attack said:
Hopefully someone knows for sure, but I believe that rule is no longer in force.

I would think so too as quite a number of 3rd-party software provide automatic order-sending capabilities for option trades. The rule was ridiculous to begin with. Whoever thought of this rule should really get a MRI scan of his/her brain.

alg0_rhythm · Oct 6, 2017

This law is indeed antiquated. There are even platforms out there now like Alta5 that specialize in automated/algorithmic options trading at the retail level that place orders through broker APIs. Pretty cool.