Exchanges(CBOE)/IB - What is this trick?
- Thread starter NoMoreOptions
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Quote from omcate:
Hi,
It was a Good-Until-Cancelled Buy-To-Close order. I am basically a premium seller, who try to take advantage of the time decay. Hence, I frequently enter BTC orders to close out option positions.
It's really a "buy" order... and would at most places not be considered a separate long position in the same option contract that you were short preceding said order!
I am however allowed, at one firm where I have accounts, to be long and short the same month/strike
Ice
But in a different account ? I'm assuming that the only reason you would do this is if you had two systems that you wanted to keep separate, or if they were hedges against something else in the accts. If it's just two systems-type trades and not being used to hedge different positions in those, I would consider netting them out and keeping track of the results on paper and then transferring the p/l from one acct into the other instead of paying double commisions and margin. Anyway, I'll be more than happy to try and answer questions relating to how things happen on the floor. so fire away if you got any questions.
Vega
Vega
Quote from vega:
Was your order being worked by a broker, or was it in the book ?? My only guess was that an actual broker was working the order, and what probably happened was someone else changed the quote. Unfortunately it happens all the time in the OEX and SPX. Generally, here's the scenario---
Your broker is on one side of the pit working the order, representing your 1.50 offer, let's just say the market is 1.20-1.50. On the other side of the pit, a broker quotes the same option, and the MM quote it 1.40-1.70 and instruct the quote reporter (an exchange official whose job it is to update quotes) to change the market to 1.40-1.70. While this is happening, your broker is busy working another order, and doesn't see that your offer is not being represented. Futures then move, and MM are now 1.55 bid before your order is executed. You cancel/replace your offer up to 1.55 (the current bid) and get filled instantly. If your order was being represented electronically, I have no idea how they could have increased the bid to 1.55 without you being filled at 1.50, so my guess is that your broker just didn't properly represent your order, and AMAZINGLY it worked to your advantage.
Vega
thanks for your comments. However, my order was electronic sent via IB TWS. THAT is why I'm so confused.
Quote from omcate:
Similar incident has occurred several weeks ago. I entered a BTC limit order @ 0.15 for an INTC option. The ask price then dropped to 0.1. I cancelled the order. Re-enter it @ 0.1 and was filled instantaneously.
This is easy to explain since options on this stock are traded on multiple exchanges... you simply found a better offer at a different exchange than you were currently bidding at/on. (AMEX/CBOE/ISE/PSE/PHLX...)
Vega, are you forgetting that I'm talking about options on OEX?
Forgot that you were talking OEX. OEX, NDX, and SPX are probably in a fast market more than any other product at the CBOE. Generally this will happen anytime the futures start to bounce around or the autoquote is messed up. I think there are a few people on this board affiliated with IB that may be able to give you better advice, but remembering that its OEX your situation doesn't really surpise me at all. Although I probably didn't answer your question, I hope some of it gives you a little insight into what goes on down there.
Vega
Vega