Options Broker for Spreads

M

Max875

I am interested in a new options broker for spread trading. Have any of you dealt with PTI Securities (www.ptisecurities.com)? PTI’s philosophy makes sense, but the commission rates and online platform does not compare to TOS, IB or OptionsXpress.

I have included some information from PTI’s website below:

Excellent, Fast Spread Execution

Superior spread execution is critical and all PTI brokers fight to get the best and fastest execution. Many PTI clients do spread trading and our business is built on premium spread execution. Each broker selects the appropriate exchange based on the best price for each trade - not a pre- arranged exchange "switch". Open trades are worked in the trading pit continuously. PTI brokers know where an order is likely to be filled and how to "work" that order on the floor. A network of off-floor staff on trading desks augments this system, and are able to move orders between exchanges, if necessary, to obtain the best and fastest executions.

PTI is independently owned and operated so our brokers represent only your side of the trade. This independence is invaluable - instead of being limited to a single point of execution, we are able to "shop" our customers’ equity and option orders for the best available price.

Competitive Commission Rates

PTI is not the cheapest place to trade, but we know that there is more to gaining your business than simply the commission rate. Obtaining the best possible executions is what our clients want - at a fair competitive rate - and PTI delivers!

Online Trading Commission Rates Stock & Index Options:

Option commissions are $5.00 per contract for the first 10 contracts. Contracts 11-20 are $4.00 per contract. If you actively trade 20 lots or higher, please give us a call for special discounted rates. There is a $29.00 commission minimum.

Number of Contracts / Cost

1-5 / $29.00
10 / $50.00
15 / $70.00
20 / $90.00

Broker Assisted Commission Rates Stock & Index Options:

Broker assisted option commissions are 25% higher than the online commission rates, with a $45 commission minimum.

Number of Contracts / Cost

1-7 / $45.00
10 / $62.50
15 / $87.50
20 / $112.50

Thank you,

Max875
 
Quote from Max875:

I am interested in a new options broker for spread trading. Have any of you dealt with PTI Securities (www.ptisecurities.com)? PTI’s philosophy makes sense, but the commission rates and online platform does not compare to TOS, IB or OptionsXpress.

I have included some information from PTI’s website below:

Max875
More...

I don't find anything unique or of value in their "philosophy" that you posted. Replace the first paragraph with NBBO. The rest is just marketing BS, "premium spread execution", LOL.

Commissions are way too high IMO.

Go with TOS, OX, or IB.
 
I have no experience directly with this firm, but here's a funny story about them. A few years back when I went through the membership process to get my seat on the "evil" CBOE, we had a number of guest speakers throughtout the weak. One was from Morgan Stanley, and she was telling us "Give us your best price the first time, that way we don't have to keep quoting stuff over and over." The reality, is that they NEVER ever hit a bid, or lifted an offer, so all she was doing was trying to ingrane into us that we need to trade for less edge -- yeah right. Then there was the guy from PTI. He was bitchin and moanin about having to "leg" into spreads to get better prices for his customers. Like it was soooooooo difficult to trade on a 20 cent wide spread market. He kept complaining, "You know guys, I shouldn't have to leg into spreads to get better prices, I'm having to take a leg and a direction bet in order to get better prices for my customer." No sh*t !! We give you a 20 cent wide market, knowing in advance that we'll probably trade it a nickle inside that either way, and this guys crying poor about realistically a 10 cent wide market. What did he want us to do, "Okay Mr. PTI, I'll pay the offer and sell you the bid so that YOU look good to your customer, meanwhile I just lost $1000." Sorry bout the rant, but hearing that name brought up that memory.

Vega:D

One more funny thing about the chick from Morgan Stanley. She said,"You know, our institutional customers don't like to sell options priced under a dollar, so if there's something that you're only .80 or .90 bid for, try to bid a dollar, and then they'll probably sell them to you." People started looking around the room like, "Are you for real lady ??" I got this thing worth .78, I'm bidding .80, may pay .90 if the stock goes my way, and you want me to bid a buck just so your guy can dump 1000 on us ? It amazes me how some people assume that others have no brain.
 
Let me preface this by clearly stating that I am in no way associated no or in the past nor am I contemplating any future relationship with PTI.

now that is out of the way I will tell you my own thoughts on the matter. Sometime last year I decided I needed some knowledge on the topic of options so I drove up to chicago and took the OIC's two day class. Good value for the money btw. At the end of the class everyone goes down to the OEX pit after close and gets to play trader. Dan Haugh was my coach for that thirty minutes. Afterwards during cocktails and beer I chatted a bit with his brother Tom. All I can say from this is that both Tom and Dan are very nice and very intelligent guys, with a massive amount of experience both in the pits and as brokers.

We talked a bit about brokers and commissions and Tom made a case for the advantages of having an expert handling your complex option spreads. Now I've always been smarter than anyone I'm standing next to, so really what I heard was along the lines of "yada yada yada ya..." I was paying 12.95 at the time for a ten lot. There is no way in hell you could get me to see any advantage in using someone that cost more. Then I started trading ratio spreads on the spoos. Suddenly the spread was 3 to 5 points as opposed to .5 to .25 . And my orders rarely ever got filled inside that. So I got to thinking about whether there might be some advantage to using an expert if they could get me better fills etc...

So basically what I'm saying is that if a broker could show me that they can consistanly get my spread for a better price I'd be more than willing to ante up an extra fifty up front to save 500 on the trade. Just to be clear I am NOT saying PTI or any other broker for that matter has ever claimed they could do this for me.

I use optionsxpress and they are great guys and their website is set up perfectly for options trading, they are only cost effective if you are trading ten lots or more though. And while I know the top levels in the company have a lot of experience it decreases significantly as you move down. I once asked about a CBOE busted trade and the response I got was "what's a busted trade?" and most of my live help questions get directed to the FAQ whether or not it answered my question.

well thats pretty much my nickel
-doji
 
What kind of spreads were you trading that you got 3 - 5 point wide spreads ????? Not doubting you, but that seems very odd. Had a good friend that used to work at Refco. They had sales trader that was such a scumbag. He would have a customer that wanted a market on an option or spread. Let's say the market was 2.50 - 2.80, and he knew the customer was a buyer. He would tell the customer the market was 2.70 - 3, and the customer LOVED the fact that this guy could get him filled at 2.80 !!! Not implying that is the case with your deal, but just a possibility.

Vega
 
All Posters:
Even though I had to pay up for the service, I always got great service from Man (ED&F Man/Man Financial). I don't have an account with them anymore (IB now), but for a new trader, I would still recommend them. The way things are changing in this industry, I can't say with authority that they are the best, but I do remember the desk taking time to show me how to get the job done right. Everything from how to call the order, to what kind of software to buy. Just my opinion. Best Regards, Steve46
 
vega,

I was trading spreads on the spx and oex. I just checked quotes to make sure I wasn't completely crazy looks like about a 2 point spread on most of the strikes on the SPX. So maybe my memory is faulty or I'm remembering the spread on the actual spreads.

-doji
 
Not uncommon for the quotes to show individual options in those products 2 bucks wide, but spread market should've been much tighter. I used to trade in the SPX, (left in Jun 2002), I would've got my head ripped off by the broker if I gave him a 3-5 pt wide market unless the SP was going crazy.

Vega:D
 
Vega,

interesting. I just checked optionxpress quotes on spx straddles
looks like I'm seering march at the money with a 1.80 spread
as I move out from their the spread increases to 2.80 twenty points out. I'm seeing 4 bucks for the rest of the months. I'm just skimming and condensing here. Whats your opinion?

As for the broker taking your head off do you think that gives an edge to the brokers with their own broker in the pit as opposed to subbing through someone else?

-doji
 
Quote from doji:

Vega,

interesting. I just checked optionxpress quotes on spx straddles
looks like I'm seering march at the money with a 1.80 spread
as I move out from their the spread increases to 2.80 twenty points out. I'm seeing 4 bucks for the rest of the months. I'm just skimming and condensing here. Whats your opinion?

As for the broker taking your head off do you think that gives an edge to the brokers with their own broker in the pit as opposed to subbing through someone else?

-doji
More...

What you see if not necessarily what you get, it's generally tighter. If you see the March ATM call 28-30, if you had it quoted in the pit it's probably no wider than 28.50-29.50. Straddles are even probably 1.5 pts wide. As you get farther out the spreads may widen a bit, but they're not as wide as you see on the screens. As for your broker, shouldn't really matter. At this point the MMs are going to quote the same way for pretty much everyone (unless there's a customer that is strictly building a position on way, in which case the locals will fade him). Using a "two-dollar" broker shouldn't adversely affect the quotes you're getting.

Vega:D
 
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