Exchange Futures Spreads on IB

[bone]

For the first time since I started taking on private clients, I can now say that a solid percentage of my clients are using IB accounts to good effect in order to trade exchange supported futures spreads.

I am not referring to creating synthetic spread combinations through TWS - I am talking about pulling up a singular order book or ticket for an exchange listed spread, and where it is the exchange algorithm that internally matches the leg components.

This is very nice. These exchange spreads will also accept any type of exchange execution order that the singular product will - like FOK, OCO, limit orders, MOC, etc. etc..

I would encourage any IB customer who trades futures to also try out the exchange futures spreads.

http://www.cmegroup.com/confluence/display/EPICSANDBOX/Futures+Spreads

http://www.cmegroup.com/confluence/display/EPICSANDBOX/Summary+-+Futures+Spreads

http://www.cmegroup.com/clearing/margins/spread-calc.html

http://progressive.powerstream.net/008/00102/edu/impliedpricefunctionality/player.html

http://www.cmegroup.com/trading/interest-rates/intercommodity-spread.html

http://www.cqg.com/docs/ExchangeTradedStrategies.pdf

https://www.theice.com/publicdocs/technology/Additional_Implieds_FAQ.pdf

http://www.cqg.com/Docs/SpreadSymbols.pdf

 

[Maverick74]

For the first time since I started taking on private clients, I can now say that a solid percentage of my clients are using IB accounts to good effect in order to trade exchange supported futures spreads.

I am not referring to creating synthetic spread combinations through TWS - I am talking about pulling up a singular order book or ticket for an exchange listed spread, and where it is the exchange algorithm that internally matches the leg components.

This is very nice. These exchange spreads will also accept any type of exchange execution order that the singular product will - like FOK, OCO, limit orders, MOC, etc. etc..

I would encourage any IB customer who trades futures to also try out the exchange futures spreads.

http://www.cmegroup.com/confluence/display/EPICSANDBOX/Futures+Spreads

http://www.cmegroup.com/confluence/display/EPICSANDBOX/Summary+-+Futures+Spreads

http://www.cmegroup.com/clearing/margins/spread-calc.html

http://progressive.powerstream.net/008/00102/edu/impliedpricefunctionality/player.html

http://www.cmegroup.com/trading/interest-rates/intercommodity-spread.html

http://www.cqg.com/docs/ExchangeTradedStrategies.pdf

https://www.theice.com/publicdocs/technology/Additional_Implieds_FAQ.pdf

http://www.cqg.com/Docs/SpreadSymbols.pdf

Bone, are there are any spreads you or your clients trade that IB does not offer?

 

[bone]

Bone, are there are any spreads you or your clients trade that IB does not offer?

Sure. And it varies between clients in terms of to what extent that client is capitalized and who they clear quite frankly.

Most of my clients use CTS and TT and CQG-IC ( and some are using RTS, etc.) because they are full time professional traders and those platforms are what they got used to over the years, but my point is that I now have a core group of clients who have established themselves with IB and are finding some success with it. And they are swing trading exchange supported futures spreads.

 

[risknav]

Thanks for the information, I’m a big fan of using exchange supported spreads over the synthetic alternatives because they almost always (if not always) provide a better execution price and nullify leg-risk.

Do you or any of your traders use Futures Options?

I’ve read some old previous posts here and the consensus was that IB did not offer exchange supported spreads for Futures Options on GLOBEX.

Is this still the case, or has some functionality been added since it was last discussed here? – This question goes out to anyone with knowledge.

http://www.cmegroup.com/confluence/display/EPICSANDBOX/Options+Spreads

 

[bone]

Thanks for the information, I’m a big fan of using exchange supported spreads over the synthetic alternatives because they almost always (if not always) provide a better execution price and nullify leg-risk.

Do you or any of your traders use Futures Options?

I’ve read some old previous posts here and the consensus was that IB did not offer exchange supported spreads for Futures Options on GLOBEX.

Is this still the case, or has some functionality been added since it was last discussed here? – This question goes out to anyone with knowledge.

http://www.cmegroup.com/confluence/display/EPICSANDBOX/Options+Spreads

Great question, I'll ask my clients at an upcoming Group Webinar and report back here. I can say that some of my clients come to me as options traders and they continue to trade options spreads.

I'm assuming that you are especially interested in this functionality ( options on futures ) on IB ?

 

[risknav]

Great question, I'll ask my clients at an upcoming Group Webinar and report back here. I can say that some of my clients come to me as options traders and they continue to trade options spreads.

I'm assuming that you are especially interested in this functionality ( options on futures ) on IB ?

That’s correct.

I’ve been trading option on futures spreads for a few years now but almost exclusively on the SGX exchange. They don’t support native option spreads, and at times the posted bid-ask spread can get really wide even though you can get a much better execution price if you start at the mid-point and move up or down (dependent on buy or sell).

This is where synthetic spread pricing can really give you a horrible execution, since IB will execute on that bid or ask. It’s always been my choice to take the leg-risk over this since even a small move in the underlying without a full manual (spread) execution would give me a better price – by hundreds or thousands depending on total contracts. The problem is when you can’t do it because of how it will affect your margin, and you’re forced to send the order synthetic so IB “knows” this is your intention.

I know certain products on GLOBEX are much better, for a few months now I’ve been trading natural gas (NG) options and during US market hours the spread is tight, but I’ve still been legging in because I can almost always execute in-between the posted bid-ask by 1 or 2 ticks. Again, depending on how many contracts your trading this can be a large sum difference.


I know TWS has a “directed” choice for GLOBEX option spreads, but I’m wondering if it’s really true or just the synthetic choice in disguise. If it were, for non-exotic supported spread orders I should be able to get some or all of that price improvement and nullify leg-risk.

 

[feyri]

Bone what do you do about charting these spreads on IB?

As far as I can tell, while IB support execution of exchange traded spreads, they do not support charting of exchange traded spreads.

 

[bone]

Bone what do you do about charting these spreads on IB?

As far as I can tell, while IB support execution of exchange traded spreads, they do not support charting of exchange traded spreads.

I don't chart on my execution platforms - IB TWS or TT XStudy. Never had. I have some clients who charts on CTS, however. We chart typically on eSignal - sometimes CQG.

 

[spreadem]

Bone what do you do about charting these spreads on IB?

As far as I can tell, while IB support execution of exchange traded spreads, they do not support charting of exchange traded spreads.

Good Question. I use TT, but the charts are just ok. I am curious how others chart exchange traded spreads.

 

[bone]

Good Question. I use TT, but the charts are just ok. I am curious how others chart exchange traded spreads.

We use a special technical study designed expressly for futures spreads, and therein lies the rub for the "basic" Charting indicator packages these execution platform providers typically have that won't allow considerable customization. CQG Integrated Client a notable exception.