Hidden options order @ IB

ajacobson · Jul 22, 2020

I would urge you to read the exchange filings - there is a fair amount of misinformation about hidden liquidity and hidden orders in options.

guru · Jul 22, 2020

ajacobson said:
I would urge you to read the exchange filings - there is a fair amount of misinformation about hidden liquidity and hidden orders in options.

Looks like IB implements some of its own workarounds, while potentially not supporting all exchange features, though IB does implement some exchange-specific features selectively. Basically their SMART routing hides some of that functionality, which is OK to an extent.
Though hiding options orders seems difficult in general, and I personally have difficult time to find any other hidden orders when I'm walking my own orders and don't hit any hidden liquidity.
Also, hiding an order would probably exclude it from the initial auction, while my visible orders sometimes seem to get picked immediately through the auction process. All this just works differently than with stocks and there may be downsides to trying to hide options orders. Though personally I wish this was widely supported.

trend2009 · Jul 22, 2020

guru said:
I currently do this via IB using displayed qty, basically not showing the full qty of my order, but still having to show some qty.
Is this what you're referring to?

how can you show only part of your share? I mean how to configure tws to do that?

guru · Jul 22, 2020

trend2009 said:
how can you show only part of your share? I mean how to configure tws to do that?

I do that when submitting orders via API, but I think you you can also submit order manually and later change the display qty. Add display size column to your open orders window/panel.

guru · Jul 22, 2020

trend2009 · Jul 22, 2020

guru said:
I do that when submitting orders via API, but I think you you can also submit order manually and later change the display qty. Add display size column to your open orders window/panel.

which field to set for api iceberg orders?

guru · Jul 22, 2020

trend2009 said:
which field to set for api iceberg orders?

https://www.interactivebrokers.com/en/index.php?f=595

FSU · Jul 23, 2020

ajacobson said:
Yes, they are supported by a number of exchanges. They are live on some smart routers of the consolidators and made available to customers of the brokers that participate in the routing agreement.
Traditionally IB has not been a participant. You might want to ask them. Look at the exchange filing(s).

They work like this - assume a broker cuts a routing deal with SIG. SIG may show 10 up for the public feed but actually offer 20 up for the houses they have routing deal with. They have been around for the better part of a decade.

Interesting, I never realized this. Thanks for the insight.

JSOP · Jul 25, 2020

tonyf said:
All my hidden option orders are showing up on TWS with a dark blue status (vs green for stocks) in the activity window.

Are hidden orders permissible/allowed by the exchanges? will they get filled if status is dark blue?

Thanks

Whenever an order is not marketable, IB will keep it on its own server instead of sending it to the exchange and will only send it to the exchange when it matches the bid or ask. The problem with that IB will send it at the last minute when the order matches the bid or ask on the exchange and when that happens it might become a market order ie liquidity-taking order and it incurs a commission instead of receiving a possible rebate even if your hidden order is originally a limit order aka liquidity-adding order. And if you happened to be routing the order to an exchange that charges higher commissions for liquidity-taking orders, then you get doubly screwed.

Just be prepared for that.

trend2009 · Jul 25, 2020

JSOP said:
Whenever an order is not marketable, IB will keep it on its own server instead of sending it to the exchange and will only send it to the exchange when it matches the bid or ask. The problem with that IB will send it at the last minute when the order matches the bid or ask on the exchange and when that happens it might become a market order ie liquidity-taking order and it incurs a commission instead of receiving a possible rebate even if your hidden order is originally a limit order aka liquidity-adding order. And if you happened to be routing the order to an exchange that charges higher commissions for liquidity-taking orders, then you get doubly screwed.

Just be prepared for that.

What you described is for option hidden only I guess. For stocks, IB sends hidden order directly to the exchange,am I right?