I will add even further that you can access the "actual" ISE spread order book on TOS and actually "lift" a "real" market there. You will notice the bids and offers on the actual spreads differ from what TOS shows you as the natural spread. Just a little fyi.
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Buying a spread at the natural?
- Thread starter wooldog
- Start date
Quote from opt789:
Mav, it has been years since I have been a stock option market maker (I trade futures options now), but are you saying people no longer have the ability to send a spread order to an exchange? There are no brokers walking into the pit? Like I said, if any public spread order came into a pit I was in it got filled at the NBBO at the worst case even if we did not show that market and we didnât agree with the exchange that was disseminating it, or if it was just a one lot. We would give the public 20 no matter what and then fix the market.
Sure you can send a spread order to the exchange. There is no requirement for a market maker to fill it. This guy is sending what he "thinks" is a marketable order. That is where the breakdown is here. TOS is NOT showing you the real spread market. They are doing a mathematical calculation on what the spread could be if you hit the bid and lifted the offer or in this case on a straddle, lifted both offers. The problem is many times a small order comes in and throws off the spread market and rarely is someone going to fill you. In fact, I'll one up that by telling back in the day what I tried to do is be that one lot! If I was trying to fill a spread on a 20 lot, I would bid a one lot on one of the sides to move the spread market hoping to get filled on the spread! No such luck. However, my one lot always got filled. LOL.
Quote from FSU:
If the spread is sent directly into the COB on the CBOE, and it can be filled on the quoted markets on that exchange, it will auto-trade with the given markets. This is not the case if you see the best bid or offer on another exchange.
Right. That is true anytime you enter a marketable order on a spread book. That is not what he is doing.
Quote from Maverick74:
Right. That is true anytime you enter a marketable order on a spread book. That is not what he is doing.
Maybe I misunderstood. The OP entered a spread order that he felt should have been filled by simply trading on the best quoted markets in the individual options. If this was the case and these best quoted markets were on the CBOE, if the spread was entered into the CBOE COB, it would automatically take the options from the quoted individual markets.
Was this the case, or did I misunderstand the OP?
Quote from FSU:
Maybe I misunderstood. The OP entered a spread order that he felt should have been filled by simply trading on the best quoted markets in the individual options. If this was the case and these best quoted markets were on the CBOE, if the spread was entered into the CBOE COB, it would automatically take the options from the quoted individual markets.
Was this the case, or did I misunderstand the OP?
No, he did not enter a spread order on the COB at CBOE. TOS allows you to enter a spread market on just about anything. It could get routed to the COB but only if he "sends" it there. Same with ICE. You can simply enter a spread order and smart route and let TOS send the order for you.
Are you really a Seminole?