For the past year or so I've been actively trading options using Schwab's Walk Limit order type to successfully find hidden liquidity within the spread.
For the past several weeks, the liquidity that I'm used to finding has almost entirely dried up, across dozens of underlyings. This has happened with individual tickers occasionally, but I've never seen it like this: it was like a switch was flipped one random afternoon in early February.
I can still get decent fills in a few select strikes for a few select tickers, but for like 99% of the options I trade, those types of fills have evaporated. Also FWIW, I'm not designated as a Professional Customer, or at least I shouldn't be - my orders/day are under 390.
I have noticed that the exchanges on which my trades execute have changed dramatically - for example, normally the majority would take place on CBOE or PHLX, but since early Feb they've predominately moved to the MIAX exchanges.
So I've been down the rabbit hole trying to understand what might have changed. There's so many potential variables at play that I'm not sure what real insight is possible, but here's a few possibilities I've been considering:
1. Schwab changed their PFOF arrangements, possibly in relation to the onboarding of TD Ameritrade customers that began this month. I assume my orders were being filled by liquidity providers that had a certain arrangement with Schwab, and maybe that arrangement has now changed.
2. My account has been somehow flagged by the MM/LPs who used to fill my orders. I don't know if this is truly possible, but there are a number of threads on this board where other users raise the possibility; notably this one, which interestingly, was posted in early February 2021 - the same week in which this happened for me this year. Unfortunately, @Speedtrader1 never returned with an update or follow-up.
There doesn't seem to be a consensus on this board as to whether or not this is something that can happen, but it would certainly explain things. Does anyone know for certain that specific retail accounts can/can't be identified via equity options orders?
3. The liquidity is simply no longer there, due to some larger change in some other factor: volatility, MMs shuffling around their algorithms, who knows what. I can't find anything indicators from early Feb that are consistent across the affected underlyings, or any market news or events that might indicate something changed.
If anyone can offer any thoughts or insight, confirm or deny this is the case with their recent orders also, or suggest other breadcrumb trails to follow, I'd be very grateful.
For the past several weeks, the liquidity that I'm used to finding has almost entirely dried up, across dozens of underlyings. This has happened with individual tickers occasionally, but I've never seen it like this: it was like a switch was flipped one random afternoon in early February.
I can still get decent fills in a few select strikes for a few select tickers, but for like 99% of the options I trade, those types of fills have evaporated. Also FWIW, I'm not designated as a Professional Customer, or at least I shouldn't be - my orders/day are under 390.
I have noticed that the exchanges on which my trades execute have changed dramatically - for example, normally the majority would take place on CBOE or PHLX, but since early Feb they've predominately moved to the MIAX exchanges.
So I've been down the rabbit hole trying to understand what might have changed. There's so many potential variables at play that I'm not sure what real insight is possible, but here's a few possibilities I've been considering:
1. Schwab changed their PFOF arrangements, possibly in relation to the onboarding of TD Ameritrade customers that began this month. I assume my orders were being filled by liquidity providers that had a certain arrangement with Schwab, and maybe that arrangement has now changed.
2. My account has been somehow flagged by the MM/LPs who used to fill my orders. I don't know if this is truly possible, but there are a number of threads on this board where other users raise the possibility; notably this one, which interestingly, was posted in early February 2021 - the same week in which this happened for me this year. Unfortunately, @Speedtrader1 never returned with an update or follow-up.
There doesn't seem to be a consensus on this board as to whether or not this is something that can happen, but it would certainly explain things. Does anyone know for certain that specific retail accounts can/can't be identified via equity options orders?
3. The liquidity is simply no longer there, due to some larger change in some other factor: volatility, MMs shuffling around their algorithms, who knows what. I can't find anything indicators from early Feb that are consistent across the affected underlyings, or any market news or events that might indicate something changed.
If anyone can offer any thoughts or insight, confirm or deny this is the case with their recent orders also, or suggest other breadcrumb trails to follow, I'd be very grateful.
