My "sell to open" option did NOT hit any markets today!!

[Cabin111]

Don't keep us in suspense... did you get filled after specifying CBOE? Lol. Was it at a better price than 65₵?

Put in my 65 cents after hours...I wanted to do "good till cancelled". The CBOE will not allow it...So I put it in for "day only".

 

[earth_imperator]

Well, option markets are more complex than equity market and both would suffer without Market Makers. Option markets would suffer without their depth and liquidity. They would not survive. What irks me about option and equity markets are the fragmentation that many exchanges cause while companies like NASDAQ, CBOE, NYSE and MIAX own many option exchanges and profit from the fragmentation. I would prefer one order booked with time/price priority. Let them each have one!

Do you mean NBBO is not applied with options?

 

[Robert Morse]

I did not say that. I said without option market makers, the only "NBBO" would come from limit orders placed by customers which would be either much wider spreads in many cases no bids or offers at all. And then about my comment on fragmentation, it makes it very easy for internalization without giving a fill to the orders that helped create the NBBO. I do not think it is fair or equitable that if a market is 1.00 x 1.05 and I bid 1.02 for 50 calls, that a sell order can be sent to another option exchange and a MM can match my price and I do nothing. IMO, Having 16 option exchanges is not for the benefit of the public. It allows MM to make wider markets and post smaller size than their trading systems are willing to trade with, because of directed order flow, they can do that. They get first look and that allows them to match what might be the order where you put yourself at risk first.

Do you mean NBBO is not applied with options?

 

[TheDawn]

I'm really ticked at Fidelity. The worst thing is they were saying this was in MY best interest!!

I own 500 shares of Farmland Partners (FPI)...Option expired worthless on Friday. I wanted to option the 17 1/2 for May 23 (not all or none).

So I put my sell to open (good till canceled) in at about an hour and a half before market closed. I put it in for 65 cents. The market showed the bid/ask at 50/70 cents.

The routing said FDLM...Here is what it says.

What is FDLM route?


Fidelity Dynamic Liquidity ManagementSM (FDLM) is Fidelity Capital Markets' proprietary intelligent order router, which provides access to displayed liquidity through ECNs and exchanges, as well as non-displayed liquidity through "dark pools." It combines historical and real-time market data with market microstructure ...

I called Fidelity asking why didn't my ask not show up on any markets. They said they were holding it. If someone bid 65 cents it would be executed. They mentioned twice about possible price improvement. Yeah, I get that and have gotten price improvement about 50 times from Schwab and Fidelity over the years.

I asked if I put it on a market will it show up? They said yes, for that market. But, since this is a lightly traded option, other people (computers) in other markets may not see it. I am thinking that there are hundreds (thousands) of computers that would see my ask, no matter which market it was on.

So, I had to cancel my ticket (it funny, I can't call it a ticket...A ticket would indicate there was an offer at the exchange), and write another option. This time I used CBOE (not knowing which exchange I would get filled with quickest). Also since I have a new order, I go to the back of the line!!

One quick question...For lightly traded options, which of these markets could I best find a fill?? Thanks...

AMEX
BATS
BOX
CBOE
ISE
NOM
PCX
PHLX

There was no price increase for choosing any of these exchanges I believe...

IB does this very often, holding the order on their server and only releasing it when there is a bid/ask. And their excuse is the same: it's for price improvement. I dunno why they do this. They don't get paid unless the order is executed. Are they holding onto the order to be sent to MM because MM is paying them more for the orderflow? So that way they get paid and we traders supposedly get a better price from the MM. That's the only logical explanation that I can think of. But then what does the MM get if it has to pay to the broker for the orderflow on one hand and giving us a better price on the other hand?

 

[TheDawn]

I did not say that. I said without option market makers, the only "NBBO" would come from limit orders placed by customers which would be either much wider spreads in many cases no bids or offers at all. And then about my comment on fragmentation, it makes it very easy for internalization without giving a fill to the orders that helped create the NBBO. I do not think it is fair or equitable that if a market is 1.00 x 1.05 and I bid 1.02 for 50 calls, that a sell order can be sent to another option exchange and a MM can match my price and I do nothing. IMO, Having 16 option exchanges is not for the benefit of the public. It allows MM to make wider markets and post smaller size than their trading systems are willing to trade with, because of directed order flow, they can do that. They get first look and that allows them to match what might be the order where you put yourself at risk first.

Having many exchanges is fine. It's the fragmentation of them that's the problem. When an order is sent, it should be broadcasted to all of the exchanges simultaneously to look for a match and not just targeting a few exchanges at a time. That way the exchanges can truly compete for our order and give us the best price.

 

[Cabin111]

Having many exchanges is fine. It's the fragmentation of them that's the problem. When an order is sent, it should be broadcasted to all of the exchanges simultaneously to look for a match and not just targeting a few exchanges at a time. That way the exchanges can truly compete for our order and give us the best price.

I would love to see the order broadcast to all exchanges...How it use to be, way back in the day. I would get silly fills by the Pacific Exchange. I was also charged something like $30. to $60. for the trade!!

I am just saying, I would have liked to have seen my order go onto at least one (semi major) exchange, for a few minutes (for price discovery). If it gets filled...Fine, I am a happy camper. If not, it can be held by my broker for a later fill (plus possible price improvement). Yesterday the stock went up a bit toward the close of the market...I may have gotten a fill (or partial). I said may, I don't know...Only 3 fills that day for that option. Just looking for cash flow...

 

[destriero]

I would love to see the order broadcast to all exchanges...How it use to be, way back in the day. I would get silly fills by the Pacific Exchange. I was also charged something like $30. to $60. for the trade!!

I am just saying, I would have liked to have seen my order go onto at least one (semi major) exchange, for a few minutes (for price discovery). If it gets filled...Fine, I am a happy camper. If not, it can be held by my broker for a later fill (plus possible price improvement). Yesterday the stock went up a bit toward the close of the market...I may have gotten a fill (or partial). I said may, I don't know...Only 3 fills that day for that option. Just looking for cash flow...

No way it was going to be filled in that underlying unless the market rolled you over (made it marketable) but GTFO of FIDO. I assume that they did it to protect the customer (illiquid series).

 

[TheDawn]

I would love to see the order broadcast to all exchanges...How it use to be, way back in the day. I would get silly fills by the Pacific Exchange. I was also charged something like $30. to $60. for the trade!!

I am just saying, I would have liked to have seen my order go onto at least one (semi major) exchange, for a few minutes (for price discovery). If it gets filled...Fine, I am a happy camper. If not, it can be held by my broker for a later fill (plus possible price improvement). Yesterday the stock went up a bit toward the close of the market...I may have gotten a fill (or partial). I said may, I don't know...Only 3 fills that day for that option. Just looking for cash flow...

To me, I feel orders should never be held by the broker and instead should be sent to and stay in a system that is broadcast to all exchanges and is accessible by all exchanges when they have not been filled and then worked constantly by all of the exchanges until they are filled. Why should the broker hold the order? The broker's job is to introduce our orders to the market very much the same as an actress' agent. For their efforts, they earn a commission when our orders are filled. So it should be in their best interest to have the orders filled asap when the price of the market is a match. Still don't know why the broker would hold our orders and not to get them filled except they are in cohort with the MM's who are paying for the orderflow. This is why I always say PFOF's got to go!!

 

[zdreg]

This is why I always say PFOF's got to go!!

Repeating the same nonsense repeatedly doesn't make it correct. In the past I have presented numbers that shows with without POFL I would encounter an extra $500 in daily commission expense. e.g. $500which would be a substantial drawdown or $125,000 drawdown on a yearly basis. The zero commission model works for me. You are entitled to your beliefs but don't try to foist them on others.

 

[TheDawn]

Repeating the same nonsense repeatedly doesn't make it correct. In the past I have presented numbers that shows with without POFL I would encounter an extra $500 in daily commission expense. e.g. $500which would be a substantial drawdown or $125,000 drawdown on a yearly basis. The zero commission model works for me. You are entitled to your beliefs but don't try to foist them on others.

So put me on Ignore. I have experienced otherwise. I have experienced better fills, better prices with brokers (at least supposedly) send orders directly to the exchanges. The loss in prices and opportunities which directly affects profitability is far more than $500 especially if you do a such high volume of trades that would result in a saving of $500??!!

Either you are lying to troll or you got your numbers wrong.