I’m wondering if anyone has a program out there that allows for buying and selling a collar or reverse collar without legging in. Like sell for .10 credit or something.
Broker or software for executing collars
- Thread starter SoCalOptionsWriter
- Start date
Robert Morse
Sponsor
You send a spread order like any other and it goes to an exchange COB.
CBOE writes this on Complex Order Handling via their Complex Order Book (COB) and Complex Order Auction (COA) :
https://www.cboe.com/us/options/trading/complex_orders/
They say that max 16 legs is possible.
But I think many brokers do it locally (in-house), if not directly routed to such a marketplace that has COB/COA.
My experience at TDA:
You can trade by the NetDebit value or NetCredit value. Ie. that value is your offer for the complex order. Then actual individual premiums are irrelevant, a match will be done on the market's actual NetDebit or NetCredit...
But I 'm not sure whether this goes to the exchange, or is rather handled locally in-house at TDA.
Here's an example for calculating the NetDebit and NetCredit for a CoveredCall (CC) from the Bid/Ask of the individual components (here LongStock and ShortCall):
https://www.cboe.com/us/options/trading/complex_orders/
They say that max 16 legs is possible.
But I think many brokers do it locally (in-house), if not directly routed to such a marketplace that has COB/COA.
My experience at TDA:
You can trade by the NetDebit value or NetCredit value. Ie. that value is your offer for the complex order. Then actual individual premiums are irrelevant, a match will be done on the market's actual NetDebit or NetCredit...
But I 'm not sure whether this goes to the exchange, or is rather handled locally in-house at TDA.
Here's an example for calculating the NetDebit and NetCredit for a CoveredCall (CC) from the Bid/Ask of the individual components (here LongStock and ShortCall):
Code:
Stock: Last=6.92 Bid=5.00 Ask=8.95
Call: Last=2.15 Bid=1.75 Ask=2.75
Opening CC:
Buy 100 Stock
Sell-to-Open 1 Call
NetDebit 7.20 (= LS.Ask - SC.Bid) ["CC Bid"]
Closing CC:
Sell 100 Stock
Buy-to-Close 1 Call
NetCredit 2.25 (= LS.Bid - SC.Ask) ["CC Ask"]
Last edited:
So after the CC I buy a put? Anyway of combining the CC and the LP for one debit or credit and trading it in one fell swoop at that price?
Robert Morse
Sponsor
You did not believe me the first time I told you, you can send it as one spread?
Last edited:
It would be nice if the broker system could handle this case (ie. adding a LP to an already existing CC to form a Collar), but I guess it can't.
But a Collar (which has it all together, ie. LS + SC + LP = CC + LP) should work.
Just pick it from the list and then see what entry fields it offers...
Unfortunately TDA's Webinterface does not have Collar in its list, maybe their TOS program has some more to offer (see the remark at bottom) :
Last edited:
Ok, I now see! The field named "NET DEBIT" at lower right. All right!
Last edited:
Robert Morse
Sponsor
Keep in mind that I did this off hours and did not check the prices or care what the mid-point was. I think $246,530 was the mid-point. We offer Lightspeed Trader, Sterling Trader Pro, EZE EMS (Realtick) and that screen shot is from CBOE SILEXX. They all have Option spread tickets and can all include the stock with options.
Robert Morse
Sponsor
I just checked. It shows the individual option markets and the stock price used and that net debit was the option midpoint with the stock price of 248.48.
But I guess it still is an editable field for the trader to specify his/her own price offer, ie. overriding the default.
It seems the "OPT NET PRICE" field has to be filled by the trader, ie. this then is slightly different from the OPs requirement (NetDebit or NetCredit).
Hmm. this is not the same... there is a big difference, IMO.
The correct method should ask just for the NetDebit or NetCredit.
Last edited: