IB has lots of problems with Option Trading

Quote from alexandert:

I had been very happy with IB future trading and decided to open an account to trade options. However, I discovered multiple issues with the way they handle options and forced to move my account to a competitor. My advice to any new trader who wants to trade options – do not bother with IB they basically sock.

For example:

- I trade stock index options, which have European expiration stile. One of my strategies is Condor with 2 legs bull and bear. When my friend trades the same strategy with Options Express they correctly recognize that the maximum possible loss on this strategy is equal the spread on either one and therefore the margin is based on a single leg. IB does not!!!
It makes a half of my trading capital obsolete.
- They recently implemented spread trading and created a lot of hype about the computerized execution. However, me and my friend discovered many times that we create the same limit spread order (his with option express and my with IB) and his order fills in 10 – 20 minutes while mine never gets filled unless I substantially lower my limit price. Couple times my spread order was filled 5 cents below the limit price.
- Even if your spread has expired the same day morning and settlement prices are known in the afternoon the margin with the expired contracts still tied up till Saturday morning!!!. It is very important for me to be able to put new position on the same day and again my friend with option express can do that. IB does not give a *&%*(&.!!!
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It seems that there's an obvious solution to your problem - open an account with OptionsXpress.
 
Quote from joeyata1:

d9d i agree with your evaluation of stock with them. the little i do with them i can see they don't fill in between ever.
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I was talking about options. Not sure of their performance on stock; as 99% of my stock trades are in PM stocks on a longer timeframe....where I have time to wait for a good fill on limit orders.

thanks though...
 
I do my options trading at RF Lafferty that can service my full service and online accounts. I have found a reputable 60 year old firm that specializes in stocks and options. The aren't the cheapest, but the fills I get are great. You can pay $8.00/trade and get a lousy fill and wind up paying much more than if you paid $50/trade and get a great fill. As a customer I have access to two inhouse independent research reports on stocks, & options. They even have an Mutual fund analysis tool that has steered me towards ETF's with an option play. (Long Term= Better returns with lower expense ratio's).
Anyway I deal with a guy over there named Scott Clarke. But I have found everyone to be helpful.
Hope this helps.
 
Quote from alexandert:

"Which exchange are you sending your spread orders to? Can you choose at optionsexpress? Maybe you should send the spreads to different exchanges to compare the fills."

I trade a single instrument only which is SPX index options. They are traded only on CBOE. Well, it looks like I have to switch to another broker as the only option at this point.
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You need to switch from the CBOE to the CME, from SPX to SP(ES). Same prices, same underlying, but only half the margin. Equity index options are subject to reg-t, futures options are subject to SPAN, thus only one side is charged. IB futures options spreads are fair right now, sometimes I get amazing fills at prices I could never leg with, other times they are mediocre.

That is more a statement about Globex and not IB.

You need to switch products.
 
Currency options seem to be liquid in the pit but not on the screen.

The main problem IB have with option trading is that some people are having problems with the software redrawing the screen. This is a problem in 845.5 and 837.4 but not the browser based 847 beta. 847 though locks up when you try and get market data for a spread order.
 
Quote from just21:

Currency options seem to be liquid in the pit but not on the screen.

The main problem IB have with option trading is that some people are having problems with the software redrawing the screen. This is a problem in 845.5 and 837.4 but not the browser based 847 beta. 847 though locks up when you try and get market data for a spread order.
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Can you please tell me the exact steps to take to get TWS to lock up while making a spread order so I can reproduce the problem? Thanks.
 
Quote from GATrader:

ktm I heard currency options are coming up soon, if not already. Are they reasonably liquid/tight? Thanks
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I have never dealt in currency options. Sorry.
 
ktm

Thanks for the advice:

"You need to switch from the CBOE to the CME, from SPX to SP(ES). Same prices, same underlying, but only half the margin. Equity index options are subject to reg-t, futures options are subject to SPAN, thus only one side is charged. IB futures options spreads are fair right now, sometimes I get amazing fills at prices I could never leg with, other times they are mediocre.

That is more a statement about Globex and not IB.

You need to switch products."

There is very little information on future options on IB site. Are spreads on ES options traded natively on CME? In other words if you put a limit order do you se a price change reflected on the data feed? That would be great if there is no middlemen or computer program waiting for bid/ask on IB site. Also, are they having the same European stile expiration? How liquid they are?
 
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