Getting the best options fills in IB...

CDoubleUU

CDoubleUU

Hello,

This is my first post here, although I have been on the site browsing for over a year. I was wondering if you traders feel it's worth it to route orders in IB through exchanges such as ISE, CBOE, etc. vs going through their "SMART" routing?

I was also wondering, do you pay for "Deep Book" level 2 data, or just the standard level 2? I use the equities level 2 data in my strategy currently. When I enter a trade, I want to see the level 2 start to chew through whole dollars, and/or want to see a large bid or ask get close to being taken out. I'm wondering if you feel or know there is a benefit to getting the "Deep Book" level 2 data, such as Nasdaq Total View, and NYSE Open Book?

Thanks for taking the time to read this and I hope everyone has a Merry Xmas and Happy Holidays!!!

-CDoubleUU
 
CDoubleUU said:
Hello,

This is my first post here, although I have been on the site browsing for over a year. I was wondering if you traders feel it's worth it to route orders in IB through exchanges such as ISE, CBOE, etc. vs going through their "SMART" routing?

I was also wondering, do you pay for "Deep Book" level 2 data, or just the standard level 2? I use the equities level 2 data in my strategy currently. When I enter a trade, I want to see the level 2 start to chew through whole dollars, and/or want to see a large bid or ask get close to being taken out. I'm wondering if you feel or know there is a benefit to getting the "Deep Book" level 2 data, such as Nasdaq Total View, and NYSE Open Book?

Thanks for taking the time to read this and I hope everyone has a Merry Xmas and Happy Holidays!!!

-CDoubleUU
More...

SMART is the way to go. I go w/o the deep book but others may think differently.
 
This is a tough question to answer. IB charges extra for direct routing (1.00) so Smart may be the best default way to send an option order.

But if your only concern is quality of fills, and not rebates, etc., you may be better off routing directly to a specific exchange. This really depends on the equity and whether its a spread or not. IB is not my main broker, with mine I will typically send an order to the CBOE first to establish a price. I will then try other exchanges to maximize my rebate. Some times they are filled on the other exchanges at the same price and other times I will only get a fill on the CBOE. It will vary by exchange/product and whether its a complex order or a single order.

So you may want to play around with different routes yourself.
 
I signed up for Nasdaq Total View, NYSE Open Book, and NYSE ArcaBook the other day. So far I'm enjoying the extra depth. I will use the next few weeks to figure out if it's worth the extra $60 or so. So far I feel it's worth it, but I'm only on day 2. I will update the post when I know more.
 
CDoubleUU said:
I use the equities level 2 data in my strategy currently. When I enter a trade, I want to see the level 2 start to chew through whole dollars, and/or want to see a large bid or ask get close to being taken out.
More...
What equities are you looking at for this kind of options trading?
 
I trade off of SPY, UVXY and the underlying. I trade TSLA multiple times a week. Otherwise I'm trading whatever is in play for the following basket of stocks: BA, AAPL, NVDA, SPY, AMZN, NIO, FB, BABA, ZM, NFLX, etc. I just need volume, a significant daily level, a pattern, and preferably a catalyst. I know there are orders and/or icebergs out there I can't see, regardless of the depth I have... So going to use this month of Deep Book data to see if it gives me an extra edge.
 
FSU said:
This is a tough question to answer. IB charges extra for direct routing (1.00) so Smart may be the best default way to send an option order.

But if your only concern is quality of fills, and not rebates, etc., you may be better off routing directly to a specific exchange. This really depends on the equity and whether its a spread or not. IB is not my main broker, with mine I will typically send an order to the CBOE first to establish a price. I will then try other exchanges to maximize my rebate. Some times they are filled on the other exchanges at the same price and other times I will only get a fill on the CBOE. It will vary by exchange/product and whether its a complex order or a single order.

So you may want to play around with different routes yourself.
More...

Do you get rebates on complex orders? Complex orders in general cost me more but the risk of legging into them make it worthwhile to just do them together. The costs can vary wildly though from $1.50 to $0.3 for each option in a complex order
 
traider said:
Do you get rebates on complex orders? Complex orders in general cost me more but the risk of legging into them make it worthwhile to just do them together. The costs can vary wildly though from $1.50 to $0.3 for each option in a complex order
More...
I have not been using IB much for a while, but with my system, yes. I get a .75 a contract rebate from the EDGX in a complex order (in non penny options), so a simple butterfly 1x will get me a $3 rebate. As mentioned earlier, I will usually route a 1 lot to the CBOE first (where there are no rebates/charges) to establish a base price, then try that price on the EDGX.

I would assume that you would get the same rebate with IB, but would have to pay the extra direct route fee, or you could change the smart route to max rebate after you established a price with best fill, but this would be a lot of trouble. I guess this issue is do you still get rebates when direct routing with IB.

I will say this saves me a substantial amount of money each month, since most of my orders are complex orders.
 
You must log in or register to reply here.
Back
Top