Can't get filled on the bid

[DeltaRisk]

I have noticed many times that when I enter a limit order to sell options on the bid, the bid suddenly moves lower and I don't get filled. I have noticed this even with 1 lots while there were where hundreds of contracts sitting on the bid and all of a sudden, as soon as I place my sell limit order at the bid price, they all vanish and move lower. I have never sold options using a market order, but if I did, would that still happen? I don't think it should because other traders should not be able to see market orders, only limit orders. I reason that market orders should only be visible by my broker and the exchange would execute them on first-come first-serve basis against best limit order offers on the books. Is that true?

Low latency algo will fix this.

 

[ajacobson]

1. That's true, but in the cases I was looking at, the underlying was stable.
2. I've seen this when trading one lots many times. Most recent example was on DLTR before earnings.

WE can chatter around this forever. YOUR BROKER OWES YOU A FILL. Options trade on 15 exchanges - with the exception of VIX and SPX. Some still single list but very few. Quotes are 10 up electronic with trade through protection. If you improve a market for one option your order will not be reflected. This is the derived order rule - where people would improve a market for one lot and then expect the exchange to show 10 up and try to hit the other nine from a different account, but that not what anyone is talking about. However if you one lot sale doesn't fill at the bid - your broker screwed up and owes you a fill.
DLTR is multiply listed and quotes include size. You should be able to sell hundreds at the bid and buy hundreds at the offer.
Order qualifiers can screw this up, but even a 10 lot all or none done at the bid/offer will fill instantly.

 

[ironchef]

2. I've seen this when trading one lots many times. Most recent example was on DLTR before earnings.

That is strange. Never happened to me. When my offered lot was less than bid lot, I always got my fill. After the fill, sometimes the bid changed.

 

[ajacobson]

Of course you should have been filled instantly. It's when you improve the NBBO with less than a 10 lot. You won't see your improvement

 

[turkeyneck]

If you use direct over "auto", which exchange is usually the best to route you order to for getting filled? I use Etrade and trade AAPL options 10+ contracts, limit with AON most of the time.

 

[ET180]

Here's another example from today. Tried to sell an ITM 104 PUT to convert a short call into a short straddle. Could not get filled even when offering $0.05 below the best bid. Also could not get filled at best bid.

 

[ajacobson]

Stale quote. Call your help desk. You can tell by the inverted market and size. Your broker is doing a bang up job.
They owe you a fill.