IB sucks for spreads because they don't show dom for them and refuse to do anything about it...
Commodity Spread Limit Orders question
- Thread starter TWolf
- Start date
I have heard the exact same thing from clients who come to me clearing IB. Same same for the more retail and scalping/day trading oriented 'discount' introducing brokers or brokers with give-up agreements with true FCMs.
You really can, in fact, start an account with a major Chicago FCM with a very modest amount of capital - and they actually know how to clear and correctly margin a spread position with SPAN offset credits. I have clients who can carry several different futures spreads overnight using far less than $5K in margin. Easy.
Thanks for all the input. Still trying to work this out. Sent through a couple of orders Wed/Thu that still weren't executed as I expected them to be. One order (an FC spread) was executed as expected. Very confusing.
I'm going to call them one last time for straight answers and explanations. Just to make sure I'm armed with proper information and not the idiot in that phone call, let me see if I've got this straight:
SMN12/SMZ12 Spread was +20.40 (considered a "Debit Spread").
I want in at +23.40 or HIGHER/WIDER (not 23.40 "or better").
the order I want placed is, "buy 5 Jul soymeal, sell 5 Dec soymeal at 23.40 premium Jul". My only choice electronically (through this firm) is Buy Limit or Sell Limit (maybe that's the problem right there?).
Seems logical to me that I want a Sell Limit since a Buy Limit of 23.40 (placed above the current market of 20.40) would result in immediate execution (23.40 "or better").
I submit the Sell Limit and it is immediately rejected and cancelled.
I submit the Buy Limit and (as expected) am immediately filled at 21.00, "better" than 23.40.
The brokers I've talked to at this firm tell me this is the only way to enter this spread (except by market order), that there is "no such thing as a resting limit order in commodity spreads."
Are my order options of "Sell Limit" and "Buy Limit" the correct limit order types for this transaction or is this achieved differently somehow with other firms?
Do limit orders for commodity spreads work the same way they do in the outrights?
Based on what I'm hearing, it sounds like this firm simply doesn't support limit orders for commodity spreads but isn't being forthcoming with that info.(?)
Thanks again for helping out the new guy; it is greatly appreciated!
Thom
I'm going to call them one last time for straight answers and explanations. Just to make sure I'm armed with proper information and not the idiot in that phone call, let me see if I've got this straight:
SMN12/SMZ12 Spread was +20.40 (considered a "Debit Spread").
I want in at +23.40 or HIGHER/WIDER (not 23.40 "or better").
the order I want placed is, "buy 5 Jul soymeal, sell 5 Dec soymeal at 23.40 premium Jul". My only choice electronically (through this firm) is Buy Limit or Sell Limit (maybe that's the problem right there?).
Seems logical to me that I want a Sell Limit since a Buy Limit of 23.40 (placed above the current market of 20.40) would result in immediate execution (23.40 "or better").
I submit the Sell Limit and it is immediately rejected and cancelled.
I submit the Buy Limit and (as expected) am immediately filled at 21.00, "better" than 23.40.
The brokers I've talked to at this firm tell me this is the only way to enter this spread (except by market order), that there is "no such thing as a resting limit order in commodity spreads."
Are my order options of "Sell Limit" and "Buy Limit" the correct limit order types for this transaction or is this achieved differently somehow with other firms?
Do limit orders for commodity spreads work the same way they do in the outrights?
Based on what I'm hearing, it sounds like this firm simply doesn't support limit orders for commodity spreads but isn't being forthcoming with that info.(?)
Thanks again for helping out the new guy; it is greatly appreciated!
Thom
Seriously Thom, who is your broker? At the time I was at TradeStation, they had the decence to say "we don't support them"...
You can definitelyplace a non marketable resting limit order on a soymeal calendar spreads. Your order is then filled against incoming market orders like on outrights.
You can definitelyplace a non marketable resting limit order on a soymeal calendar spreads. Your order is then filled against incoming market orders like on outrights.
His problem is definitely with his broker. I can do anything with a spread order that I can do with an outright single instrument order using TT or CTS and clearing any major Chicago FCM.
He is using a retail oriented introducing broker who gives up orders to an FCM - and they are certainly clueless and misinforming. He has to use their lame, worthless execution platform so that they can take their haircut in real time.
And you do not require a voice broker or a floor broker - that's for sure.
The question is.....why won't he name who the broker is? Whats the big deal?
First, a personal thanks to Bone who was kind enough to respond by pm.
The firm is OptionsXpress.
It's where I started as a "youngster"; quick, easy, convienient. Provided everything I needed when I didn't "need" anything.
I did not want to name them until I was certain that they were the problem, not me; I didn't want to unfairly criticize or state anything untrue about anyone or any company if the issue was simply my personal lack of understanding (being relatively new at this).
Based on all the input received, it is clear that the issue IS them, not me.
I'm pretty pissed that they couldn't just tell me they didn't support the order type I wanted, especially since I am probably a pretty typical customer for them (i.e., wet behind the ears). Don't they realize that eventually I may actually learn something? Surely they wouldn't tell a knowledgeable professional this crap (or would they?). Then again, I suppose most pros wouldn't have accounts with them anyway.
For 3 years I didn't even think about it, I just used market orders so this issue didn't matter. Now that I've started to "grow up" and learn a few things, order type does matter. Because of this stunt I won't do business with them again. Stupid move on their part. The sad thing is, my experience with them has been otherwise good and problem-free and I would have recommended them for "beginning" traders; now, I don't trust them.
I previously stated that I've talked with 3 different people there in the past and been told the same thing each time, so I feel fairly confident that I'm hearing the company line from them, not a spiel based on personal ignorance. When I call them on Monday and it's obvious that I'm a bit more educated, I fully expect some serious backpeddling from them. We'll see.
So, now it's on to a different firm - a real one - where I can continue to grow. Any recommendations?
Thom
p.s. For what it's worth, I waited for almost a year before posting the question here because there seems to be an awful lot of sniping, back-biting, and outright ridiculing or others on this site. As a newbie, I almost expected to get torn apart for daring to enter the shark tank. But that did not happen. Thanks.
The firm is OptionsXpress.
It's where I started as a "youngster"; quick, easy, convienient. Provided everything I needed when I didn't "need" anything.
I did not want to name them until I was certain that they were the problem, not me; I didn't want to unfairly criticize or state anything untrue about anyone or any company if the issue was simply my personal lack of understanding (being relatively new at this).
Based on all the input received, it is clear that the issue IS them, not me.
I'm pretty pissed that they couldn't just tell me they didn't support the order type I wanted, especially since I am probably a pretty typical customer for them (i.e., wet behind the ears). Don't they realize that eventually I may actually learn something? Surely they wouldn't tell a knowledgeable professional this crap (or would they?). Then again, I suppose most pros wouldn't have accounts with them anyway.
For 3 years I didn't even think about it, I just used market orders so this issue didn't matter. Now that I've started to "grow up" and learn a few things, order type does matter. Because of this stunt I won't do business with them again. Stupid move on their part. The sad thing is, my experience with them has been otherwise good and problem-free and I would have recommended them for "beginning" traders; now, I don't trust them.
I previously stated that I've talked with 3 different people there in the past and been told the same thing each time, so I feel fairly confident that I'm hearing the company line from them, not a spiel based on personal ignorance. When I call them on Monday and it's obvious that I'm a bit more educated, I fully expect some serious backpeddling from them. We'll see.
So, now it's on to a different firm - a real one - where I can continue to grow. Any recommendations?
Thom
p.s. For what it's worth, I waited for almost a year before posting the question here because there seems to be an awful lot of sniping, back-biting, and outright ridiculing or others on this site. As a newbie, I almost expected to get torn apart for daring to enter the shark tank. But that did not happen. Thanks.
hi
FYI, I have posted a caps showing a calendar spread limit order in CTS T4 platform. darker red 1 shown at -68 is my limit order to sell jul/aug natural gas spread. It stays there and if market comes there, it will be executed. Platforms supporting these spreads are cqg trader, CTS T4 and X_trader. Your broker should support one of these.
cheers
etem
FYI, I have posted a caps showing a calendar spread limit order in CTS T4 platform. darker red 1 shown at -68 is my limit order to sell jul/aug natural gas spread. It stays there and if market comes there, it will be executed. Platforms supporting these spreads are cqg trader, CTS T4 and X_trader. Your broker should support one of these.
cheers
etem
Care to expound upon situations involving non-listed spreads? For example, a Nat Gas butterfly. The cal spreads are listed and most decent platforms allow any order type that would be acceptable on the outright. The fly is synthetic and must be constructed via 2 listed cal spreads, or 3 single legs.
Obviously, AutoSpreader handles this, but are all order types still accepted? Also, I'm specifically interested in how a resting order is managed by a front-end like TT or CQG. Does the autospreader hold the orders back until the prices line up and then submit a market order? Or does each leg sit on the exchange as a resting order and Autospreader keeps it outside of the b/a spread until the target price is achievable?
I wouldn't think it would be the latter, but the former is certainly problematic for limit orders. In the case of the former, it would seem like any type of limit order would require a fill-or-kill spec.
What am I missing?