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IB - penny option pricing *now*
- Thread starter gaj
- Start date
arl,
I understand what you mean. I use hot keys to change the price - and they are now automatically set for for the minimum tick (pennies) so to increase the price by .10 (say to lift the offer) - I actually have to hit the hot key 10 times instead of once.
I guess you could create another hot key that is good for 5 ticks/10 ticks but even that is a bit of a pain. I suggest you talk to IB to see if they can disable it somehow via the hotkeys and the drop down menu.
I understand what you mean. I use hot keys to change the price - and they are now automatically set for for the minimum tick (pennies) so to increase the price by .10 (say to lift the offer) - I actually have to hit the hot key 10 times instead of once.
I guess you could create another hot key that is good for 5 ticks/10 ticks but even that is a bit of a pain. I suggest you talk to IB to see if they can disable it somehow via the hotkeys and the drop down menu.
Quote from arl:
Why would IB charge cancel fees? I thought they are just charged to cover exchange cancellation fees, and since these are not sitting on an exchange IB does not have to worry about this. Cancellation fees only serve to discourage order submissions, which equals less commission for IB.
If you are bidding .87 - your order will actually be at an Exchange bidding .85 (not necessarily the ISE/BOX). If you change your bid to .88 then no price change is required at the Exchange (still .85 bid). However if you bid .91 - then your order at one of the Exchanges would go up to .90. So, there are times when your cancel will take place at an Exchange.
I believe that the order will only attempt to go to the BOX/ISE when a corresponding IB order attempts to trade against your penny price. Then it will go to either the BOX/ISE for a cross.
Quote from arl:
Why would IB charge cancel fees? I thought they are just charged to cover exchange cancellation fees, and since these are not sitting on an exchange IB does not have to worry about this. Cancellation fees only serve to discourage order submissions, which equals less commission for IB.
We are working on changing the cancellation fees so that they only apply when we we have to cancel/modify a resting order at the exchange. This will take approx 2 weeks.
I'm not sure how successful this will initially be as the penny quote is NOT broadcast to OPRA - thus only IB customers will see it and - there are not many (if any) who have access to the entire IB quote feed. Yes, I know that you can look at the penny options individually - but obviously too time consuming (even with IB's attempt to make it easy via the PennyOptions page in the TWS)
IMO, not much trading will take place in pennies until the quotes are part of OPRA - so the effort by IB is a good idea but rather meaningless. Also, keep in mind that you could actually miss out on a trade as a result of your penny bid.
i.e. you are bidding .87 for an option (OPRA market .85 bid 1.00 ask). You are actually bidding .85 at the CBOE (where most of the volume is). An IB customer attempts to sell to you at .87 - so your order is cancelled at the CBOE and goes to the BOX/ISE where it will attempt to trade at .87. However, many of the big broker dealers have set their programs to the ISE/BOX's price improvement process thus it is very conceivable that a B/D could be bidding (hidden) .88 in the price improvement mechanism - thus no fill for you. Also, during this time (it may take 10 seconds) the option may trade at a lower price on the CBOE.
IMO, not much trading will take place in pennies until the quotes are part of OPRA - so the effort by IB is a good idea but rather meaningless. Also, keep in mind that you could actually miss out on a trade as a result of your penny bid.
i.e. you are bidding .87 for an option (OPRA market .85 bid 1.00 ask). You are actually bidding .85 at the CBOE (where most of the volume is). An IB customer attempts to sell to you at .87 - so your order is cancelled at the CBOE and goes to the BOX/ISE where it will attempt to trade at .87. However, many of the big broker dealers have set their programs to the ISE/BOX's price improvement process thus it is very conceivable that a B/D could be bidding (hidden) .88 in the price improvement mechanism - thus no fill for you. Also, during this time (it may take 10 seconds) the option may trade at a lower price on the CBOE.
Quote from arl:
Thanks IBSoft. And as far as the other thing, is there any way to have the pull down only display the exchange native 5/10 ticks as before? The only option I see is to hide pennies, which does not affect the pull down box.
You should be able to do that by turning off the penny feature, but I tried myself and it does not work for me either. We'll fix it.
This problem has been fixed and released in TWS build 864.4.
NOTE: you can also flip the price wand back to nickels and dimes by doing the following:
* Select Configure/Global Configuration from the main menu
* Select "Display" on the left-hand side
* Uncheck the "Display penny increments in price wand" checkbox
NOTE: you can also flip the price wand back to nickels and dimes by doing the following:
* Select Configure/Global Configuration from the main menu
* Select "Display" on the left-hand side
* Uncheck the "Display penny increments in price wand" checkbox
Quote from arl:
Thanks IBSoft. And as far as the other thing, is there any way to have the pull down only display the exchange native 5/10 ticks as before? The only option I see is to hide pennies, which does not affect the pull down box.