IB's interface easy to use?
- Thread starter Hedge22
- Start date
I believe IB opens at 12 noon on Sunday.
http://www.interactivebrokers.com/en/software/systemStatus.php
IB at times will have quicker fills because they often take the other side of your trades. THI or Timber Hill Inc is the parent of IB and they make markets on all 6 equity options exchanges. In addition IB has a significant customer base and they love to pair your trades off vs. other customers thus getting the commish for both sides of the trade.
IB went ahead and offered penny trading in many options so they had the ability to shut out the floor and cross the orders 1 penny inside the markets to collect both commisions. Pretty smart move if you asked me. It benefits their customers and adds to the bottom line.
Good Luck
Jim
( new poster )
IB went ahead and offered penny trading in many options so they had the ability to shut out the floor and cross the orders 1 penny inside the markets to collect both commisions. Pretty smart move if you asked me. It benefits their customers and adds to the bottom line.
Good Luck
Jim
( new poster )
Actually, in options, you are not allowed to cross orders and print them to the tape. In options, all orders must be quoted and executed on an exchange. i.e., even if TH sees your order and wants to take the other side of it, it cannot. It must send your order to an exchange -- admittedly since it has knowledge of your order, it can simultaneously send a matching contra order to the same exchange -- but if there's a better inside contra quote on the exchange, that better quote will get it, or, if there's an equivalent customer quote on the exchange and TH is a MM, the customer quote wins.
This is a major difference between the mechanics of options vs equities. With equities, you can negotiate a transaction and print it to the tape. With options, this is not permitted. Of course, I'm referring to exchange listed options and not OTC.
Penny options are executed on BOX.
Matching customer orders is generally allowed, subject to a variety of rules, but listed options are cannot be printed to the tape like equities w/o execution on an exchange. Just like I cannot meet you on a street corner and sign over an options contract to you like I can a stock certificate.
This also makes the options market making business different from equities market making. As an options MM, you have to make your quotes available for public execution (in full view of the Goldman and Renaissance trade desks), whereas an equities MM can use payment for order flow to get orders to execute w/o ever presenting that quote on an exchange, provided certain requirements w.r.t. quotes, front-running, etc. are met.
rayl,
Youâre right and youâre wrong.
Youâre right in that the crosses have to be printed (put on the tape) at one of the six exchanges. The thing is in the last 5 years the rules for crossing have changed substantially. It used to be that you had to show your orders to the pit first and then shop the other side as a broker. That was the âtime and placeâ advantage on the floor. These days brokers can shop the orders to their hearts desire and then bring in both sides of the trade and cross the trade as long as itâs in the parameters of the market, they DONâT have to let the crowd participate.
What IB does with the penny trades is when they cross the orders they just do it in the parameters of the market and shut out the MMâs. For example if the market in the XYZ July 50 calls is say 1.40 / 1.55 and they have a customer order to pay 1.55 they may elect to take the other side of that trade and print them at 1.54 or they may have 1.55 customer sellers who have indicated they have a penny or two room as a seller and they cross customer to customer at 1.54 or 1.53.
Youâre also right in that customers always have parity and priority over MMâs and firm/bd orders. Youâre also right on the money with putting up the straight equities, any stock transaction can be crossed at any price within the high and low prints on the day.
Hope this helps,
Jim