IB - penny option pricing *now*

G

gaj

just got this:

o all traders:
Tue Oct 24 14:37:07 2006 EST

Interactive Brokers is pleased to announce the immediate availability of Penny Option Pricing. This exciting development will be available to general investors sometime in 2007. However IB clients can use IB's technology immediately to trade US options in penny price increments and gain maximum control over their options trading and investment strategies.

For full details about IB's Penny Pricing, please click here https://www.interactivebrokers.com/...formSampleView?file=penny_option_pricing.html
 
Quote from stock777:

Wondering if attempts to trade on this internal network are exempt from the cancel charge?
More...

No, I doubt it, since they said they will submit the order to an exchange at a rounded down or up price. See their examples on their website of how it will work.

Still, I wonder how it would show the exchange if the trade is filled if it fills internally at IB -- I guess they're the exchange....but do they then pass along a cancellation charge from the exchange where they placed the order? Or do they eat the charge since they're taking in the spread? Or are they? Too many questions, my head hurts.....
 
Quote from SideShowBob:

Still, I wonder how it would show the exchange if the trade is filled if it fills internally at IB -- I guess they're the exchange....but do they then pass along a cancellation charge from the exchange where they placed the order? Or do they eat the charge since they're taking in the spread? Or are they? Too many questions, my head hurts.....
More...

From what I read, they will NOT fill orders locally. All penny increment orders will be submitted to an exchange that supports penny price improvement for execution once they are matched locally. No idea about the cancellation charges though.
 
imo, the cancel thing is key, as the whole point here is to be able to shave the price you pay (for buyers) by testing the market.

If I have to try 20 times to get one good fill, I'm not going to pay 20 cancel fees.
 
Quote from rdg:

From what I read, they will NOT fill orders locally. All penny increment orders will be submitted to an exchange that supports penny price improvement for execution once they are matched locally.
More...

That's correct.
From the website:
"IB is not an options exchange and the IB penny option pricing system cannot execute option orders, only route them for execution: What the system does is provide a means for traders to communicate with each other that they may be willing to trade at a penny price between the national best bid and offer (offering both traders a chance to get a better price). If there is a potential match, IB will route both orders to an option exchange penny auction process, where the orders may be executed against each other. "
 
I assume that means if you enter a penny increment order and there is no match but the market trades better than your order you get filled at the nickel?

TNG

Quote from Steve_IB:

That's correct.
From the website:
"IB is not an options exchange and the IB penny option pricing system cannot execute option orders, only route them for execution: What the system does is provide a means for traders to communicate with each other that they may be willing to trade at a penny price between the national best bid and offer (offering both traders a chance to get a better price). If there is a potential match, IB will route both orders to an option exchange penny auction process, where the orders may be executed against each other. "
More...
 
Steve, what about the cancel issue? If I display a bid or offer on the penny system, and and pull it before its taken, is there any fee for that?

From your description , if I execute against a displayed penny bid/offer it should trade, so the cancel fee is not much of an issue there.
 
Quote from thenewguy:

I assume that means if you enter a penny increment order and there is no match but the market trades better than your order you get filled at the nickel?

TNG
More...

Assuming you are buying, the order will be rounded down and sent to an exchange so that the order is still working. E.g. you send an order to buy at $1.23. An order will be sent to one of the exchanges to buy at $1.20.
The $1.23 will be displayed on IB's penny option pricing system on the website and TWS. If there's a match, then the orders are sent to an exchange for execution.
 
You must log in or register to reply here.
Back
Top