/ES Option Spreads - min increment

[kcgoogler]

Hello Folks,

Quick question. Do non-calendarized ES spreads (say ICs, Verticals, Butterflies) trade in .05 wide increments or is it .25?

IB currently lets me change in only quarter increments; but i wonder if its a software setting or IB issue vs the contract spec.

PS:
http://www.cmegroup.com/trading/equity-index/us-index/e-mini-sandp500_contract_specifications.html
Looking at the contract spec above, it seems .25 increments - but my tos IRA though doesnt let me put trades in future options; shows that i can increment in .05s. Cant be sure it takes orders in those increments though.

 

[ktm]

Typically anything over $5 is in quarter increments and below $5 is a nickel.

However, there are times when IB wants an even quarter entered for certain spreads. Once the order is live, you can sometimes change the price by editing it in nickel increments. The dropdown box may still show quarters, but the nickel works if you click in the price field and just edit the number. You'll know when you attempt to update the new price if it was successful or not.

 

[kcgoogler]

Typically anything over $5 is in quarter increments and below $5 is a nickel.

However, there are times when IB wants an even quarter entered for certain spreads. Once the order is live, you can sometimes change the price by editing it in nickel increments. The dropdown box may still show quarters, but the nickel works if you click in the price field and just edit the number. You'll know when you attempt to update the new price if it was successful or not.

Hello ktm,

The front end on IB doesnt let me change in less than quarters; so was wondering if its a software thingy or an aspect of the market. Maybe i will just call the helpdesk.

 

[chisel]

I have only seen .05 increments when trading verticals through IB. Sorry for the small pic. Give us a concrete example where you're seeing .25 increments.

 

[rwk]

I have only seen .05 increments when trading verticals through IB. Sorry for the small pic. Give us a concrete example where you're seeing .25 increments.

That looks correct. All the price quotes in your pic are less than 5.00, so the increments should be nickels.

 

[kcgoogler]

I have only seen .05 increments when trading verticals through IB. Sorry for the small pic. Give us a concrete example where you're seeing .25 increments.

Hello Chisel,

For spreads less than 5 bucks it seem to be true; can you try to price a spread bigger than 5 bucks and see if it still lets you use .05 increments.

Here's a picture showing the price is invalid and looking at the bid ask; it does seem they actually trade only in quarters:

 

[chisel]

RWK is correct. The pt. diff. in strikes is not the issue. Any spread quote 5 pts. or over will be priced in .25 increments. So if a spread is 4.50 bid at 5.50, you can bid 4.95 but you cannot offer 5.20. Find a spread quoted around $5 and you'll see.

 

[kcgoogler]

RWK is correct. The pt. diff. in strikes is not the issue. Any spread quote 5 pts. or over will be priced in .25 increments. So if a spread is 4.50 bid at 5.50, you can bid 4.95 but you cannot offer 5.20. Find a spread quoted around $5 and you'll see.

Interesting. Thanks folks!