Good option platform?

surfer25 · Mar 12, 2013

Quote from comintel:

Use directed orders, not smart routing.

This increases the commission by at least 50%

comintel · Mar 12, 2013

Quote from surfer25:

This increases the commission by at least 50%

For both futures and stocks options? Just asking - I do not know.

It is probably not necessary in many cases.

I think if you set up a quote line each way (smart routed and directed), in some cases you can see a narrower bid and ask in directed and you can make a choice......that was my experience with futures options but of course IB's smart routing is constantly being tweaked by them.....

1245 · Mar 13, 2013

Quote from surfer25:

This increases the commission by at least 50%

That is true but you have an opportunity to buy your spread at a better price from a trader outside the IB system. That better price would save you much more than the commission. You can enter orders with smart routing that are mid market or worse and use DMA for orders outside that. Worth a try.

optionbull · Mar 13, 2013

Quote from 1245:

That is true but you have an opportunity to buy your spread at a better price from a trader outside the IB system. That better price would save you much more than the commission. You can enter orders with smart routing that are mid market or worse and use DMA for orders outside that. Worth a try.

thanks

surfer25 · Mar 13, 2013

Quote from 1245:

That is true but you have an opportunity to buy your spread at a better price from a trader outside the IB system. That better price would save you much more than the commission. You can enter orders with smart routing that are mid market or worse and use DMA for orders outside that. Worth a try.

Just curious, I very seldom have a spread filled at better than midmarket via IBs smart routing. How was your luck with that?

Thanks.

FSU · Mar 13, 2013

Quote from 1245:

I have discussed this before, then a sponsor from IB comes in and tells me I'm wrong. I had an IB account. When you enter a single leg order with smart routing, it goes to an option floor that IB has a relationship with so they get first look at the order then is represented to the public on the order book of one of those exchanges. I have no issue with that process. If you enter a complex order with smart routing, your order is NOT accessible for the world on the exchange COB until IB believes that order is marketable on one or both sides. It only resides in their system. That means you can never buy a spread on the NBBO bid or sell on the offer, unless another customer at IB trades with you. If you want to enter an order directly to the COB on the CBOE or ISE, with each leg there is a warning, are you sure? Then your order is billed at $1.00 per contract rather than your smart route fee. I have no problem with that fee too, as long as they tell you that is what it will cost.

I trade a lot of AAPL spreads that the NBBO is often $0.50 wide or more. If the NBBO is 5.50/6.00, I want to bid 5.60 and have it out there. IB will keep my order in their system until it lines up that it is close to executable.

1245

If this is true it would be a great disadvantage. Orders entered into the CBOE COB are filled FIFO. For example many times I may see a spread trading in size, I will put a bid in the COB at a lower price, know if the seller comes down, I will be filled first, even over the market makers. It may appear that my spread is not marketable, but in fact it will be if that large seller comes down in price. If my spread was held away from the COB, the fill would simply go to a market maker.

1245 · Mar 13, 2013

Quote from surfer25:

Just curious, I very seldom have a spread filled at better than midmarket via IBs smart routing. How was your luck with that?

Thanks.

You will get most of your execution in the COB from electronic market makers looking for value. They won't hit your bids or take your offer unless at that second it makes sense. If you're bidding or offering, you might get lucky with common spread like a vertical and calendar spread when some one enters an MKT order.

Remember, very few players watch the book like FSU. Most scan electronically with values preset. You can also get a large institutional order placed in the book while they shop it upstairs and get to play that way. You just can't see it.

Doobs789 · Mar 13, 2013

Like others have mentioned; more info is needed.

What type of trader? (pro, customer, etc)
Any other products besides options?
Do you require any sort of analytics, what-ifs, etc?
Commissions?
How much capital are you working with?

IMO with options commissions are of primary importance. Anything else can be added ad hoc.

optionbull · Mar 16, 2013

Quote from Doobs789:

Like others have mentioned; more info is needed.

What type of trader? (pro, customer, etc)
Any other products besides options?
Do you require any sort of analytics, what-ifs, etc?
Commissions?
How much capital are you working with?

IMO with options commissions are of primary importance. Anything else can be added ad hoc.

paying 1.42 per lot per turn at IB

although spreads in equity index usually .20 wide to .40 wide OTM

Doobs789 · Mar 16, 2013

Quote from optionbull:

paying 1.42 per lot per turn at IB

although spreads in equity index usually .20 wide to .40 wide OTM

Yeah, IB charges $0.70 per contract for volume <=10,000 contracts per month. If you are trading this that type of size, you probably won't do much better. Once your volume picks up you'll have room to negotiate with most brokers. IB is probably the most suitable for a wide array of traders due to the breadth of products offered.