Automated trading options with IB or other firms - Any advice or comments?

OddTrader · Jul 29, 2006

Automated trading options with IB or other firms - Any advice or comments?

It looks like there is very little information can be found about automated trading options.

Are there any options-specific issues or problems for practically doing automated trading?

TIA.

Gustaf · Jul 29, 2006

I have put on option trades in an automated fashion from IB API.
Its nothing special only thing is there is usually a 5 cent spread to combat.

Br

momoneythansens · Jul 29, 2006

Ditto. Gustaf mentions the main reason for lack of information on this topic - spreads. When penny spreads come around, things might change.

MoMoney.

OddTrader · Jul 29, 2006

Are there any particular options would be most suitable for automated trading, considering such as liquidity (volume?)/ strategy/ underlying instrument (stocks/ bonds/ indexes/ commodities) , moneyness (ITM/ ATM/ OTM)/ etc. ?

OddTrader · Aug 1, 2006

How about TradeStation/ OptionStation?

Q

http://www.tradestation.com/optionstationSuite/OptionStationSuite_overview.shtm

Automated trading, as it relates to direct-access electronic placement and execution of equity options trades, requires manual one-click verification before order is sent.

UQ

momoneythansens · Aug 1, 2006

Quote from OddTrader:

Are there any particular options would be most suitable for automated trading, considering such as liquidity (volume?)/ strategy/ underlying instrument (stocks/ bonds/ indexes/ commodities) , moneyness (ITM/ ATM/ OTM)/ etc. ?

Hi OddTrader, I see you have been mining the Options forums recently

If you're interested in automated trading options, you might want to PM Metooxx as I believe he has been doing automated option arbitrage for several years now.

Good luck!

MoMoney.

OddTrader · Aug 1, 2006

Quote from momoneythansens:

Hi OddTrader, I see you have been mining the Options forums recently

If you're interested in automated trading options, you might want to PM Metooxx as I believe he has been doing automated option arbitrage for several years now.

Good luck!

MoMoney.

Thanks MoMoney for the pointer.

Yes, that's true. Seems I should start a hoop up thread for automated trading options.

alanm · Aug 1, 2006

Biggest obstacle to some strategies is the cancel/modify fees and pacing/MM restrictions.

OddTrader · Aug 2, 2006

Quote from alanm:

Biggest obstacle to some strategies is the cancel/modify fees and pacing/MM restrictions.

Do you think the following offer from MB is useful?

Q
http://www.mbtrading.com/faqs.asp

Am I charged a new commission every time I cancel an order?

No. Even if an order is partially filled, you can use our "cancel/replace" feature to modify the order's price and/or size, without incurring an additional commission.
UQ

momoneythansens · Aug 2, 2006

Quote from OddTrader:

Do you think the following offer from MB is useful?

Well their commissions seem to have come down but they still don't allow naked PUTs/CALLs etc. I'm not even sure they allow verticals or other multi-legged strategies.

IIRC, their API is COM only. May or may not be an issue for you.

Do you have a proven strategy in mind for automation?

MoMoney.