limit order in between the bid and ask

H

hermit_trader

the quote from Yahoo shows

Strike Symbol Last Chg Bid Ask Vol Open Int
41.00 QQQAO.X 2.17 0.17 2.10 2.20 1,772 111,667

So it is possible to enter a limit order in between the bid and ask. Is it a common practice?
 
IN general you can put a limit order at anything you want, especially between the bid ask. However in your example, with a b/a of 2.10/2.20 I do not think they trade at $0.05 increments at that price, but if they do you can certainly put the limit order in for it. No guarantee on the fill though.
 
Quote from hermit_trader:

the quote from Yahoo shows

Strike Symbol Last Chg Bid Ask Vol Open Int
41.00 QQQAO.X 2.17 0.17 2.10 2.20 1,772 111,667

So it is possible to enter a limit order in between the bid and ask. Is it a common practice?
More...

Yes. It is a common practice to enter a limit order between the bid and the ask.

Since QQQQ options are listed at BOX, you can enter a limit order at prices like 2.16, 2.17, 2.18, etc., provided your broker support this feature.
 
Quote from omcate:

Yes. It is a common practice to enter a limit order between the bid and the ask.

Since QQQQ options are listed at BOX, you can enter a limit order at prices like 2.16, 2.17, 2.18, etc., provided your broker support this feature.
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Actually, you cannot enter limit orders at 2.16, 2.17, 2.18, you can only enter order in 0.05 increments, however, if you enter a limit buy order at the ask and route it to BOX then your order may qualify for price improvement and you can get a fill like 2.16, 2.17, 2.18 or 2.19 or 2.20 if none of the market makers is willing to improve.
 
Quote from MTE:

Actually, you cannot enter limit orders at 2.16, 2.17, 2.18, you can only enter order in 0.05 increments, however, if you enter a limit buy order at the ask and route it to BOX then your order may qualify for price improvement and you can get a fill like 2.16, 2.17, 2.18 or 2.19 or 2.20 if none of the market makers is willing to improve.
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Before posting my answer to the original poster, I entered a limited order at a price of 12.16 to sell one contract of QQQQ JAN 2006 41.0 Call, and submitted to BOX via Interactive Brokers(TWS). The order has been accepted by BOX, and stayed there for more than ten minutes.

I have no intention of trading this option, so I set the limit price to 12.16 instead of 2.16.
 
Quote from omcate:

I have entered a limited order at a price of 12.16 to sell one contract of QQQQ JAN 2006 41.0 Call, and submitted to BOX via Interactive Brokers(TWS). The order has been accepted by BOX, and stayed there for more than ten minutes.

I have no intention of trading this option, so I have set the limit price to 12.16 instead of 2.16.
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I just tried with my broker and it got rejected. That's the first time I hear you can do that. I might be wrong though.
 
Quote from MTE:

I just tried with my broker and it got rejected. That's the first time I hear you can do that. I might be wrong though.
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Few months ago, the customer support of Interactive Brokers sent me a E-mail about how to submit limit order to BOX at prices that won't accept by other exchanges using TWS. I tried it few times. Seem to be working.
 
OK, I just checked with my broker and looked on the BOX website and I can neither agree nor disagree, but then again, as far as I know you cannot do that, but if you say you can then I'm not gonna argue with you.

By the way, my broker specializes in options and most of the people there are ex-market makers with extensive industry connections so I find it hard to believe they wouldn't be aware of such a thing.

In any case, not trying to argue here.
 
Quote from MTE:

OK, I just checked with my broker and looked on the BOX website and I can neither agree nor disagree, but then again, as far as I know you cannot do that, but if you say you can then I'm not gonna argue with you.

By the way, my broker specializes in options and most of the people there are ex-market makers with extensive industry connections so I find it hard to believe they wouldn't be aware of such a thing.

In any case, not trying to argue here.
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Just ask a good friend with an account at Interactive Brokers. Invoke TWS and try it yourself.
 
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