Getting started with options algotrading

M

mastermike707

Hi,

I am looking to automatically trade options and am wondering what you think of the current set of brokerages. I currently am using thinkorswim/td ameritrade and want to automate my strategies. I have a relatively small account size <$50k and I trade about twice a week.
My current commission rates are $1.50 per options contract and $7 for stock trades and I pay no monthly fees. Is there something that I can tap into that is easy to get started? I have a programming background and am not afraid to do some coding, but TD Ameritrade doesn't seem to have an API. Is Interactive Brokers/TWS with a custom developed application my best option? I would use Quantopian but they don't support options.
 
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1245 said:
Automated option trading is much more complex than equity trading. It would take me too long to describe all the issues that can arise.
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I totally agree. Reliable historic option prices are one of the issues.
Also, To make this work, the options that would be traded must have good liquidity.
 
syswizard said:
I totally agree. Reliable historic option prices are one of the issues.
Also, To make this work, the options that would be traded must have good liquidity.
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-I'm not sure what you want to do with them, but "Reliable historic option prices" are very available. http://www.livevol.com/ or http://www.ivolatility.com/

-"good liquidity", normally refers to depth of market and the ability to find size. Since this account is small, tight markets would be more helpful, even if they are small like 10 up. Stick with underlying's that offer tight spreads to start. And, trade manually until you are ready to scale and understand the pit falls and costs of automated option trading.
 
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