Pegged-to-midpoint?

[d08]

What's the best alternative to the pegged-to-midpoint type in options? I'm currently using the REL type and trying to get the offset right but it's very tricky at certain times of the day. I'm effectively just trying to stay at midpoint for now.

 

[MacBookProHo]

What's the best alternative to the pegged-to-midpoint type in options?

trying to get the offset right but it's very tricky

Don't be so much concerned with the minuscule technicalities, but rather, look at and understand the greater picture happening and unfolding,

If you truly understand this, you will make a million,

 

[d08]

This is about automated trading and order types, not a discussion about your life philosophy.

 

[MacBookProHo]

This is about automated trading and order types, not a discussion about your life philosophy.

Either way, let me know once you have generated a million bucks in the market -- or $100,000....or $10,000 or $1,000...,

 

[d08]

There's a word for what you have where I come from which roughly translates to "yammering incontinence".

 

[FreeGoldRush]

Write software to put your order where you want it. If you use simple broker provided order types you can easily be taken advantage of. For example, a simple midpoint order type allows those on the bid and ask to move your order price just by changing their bid/ask. You need a more sophisticated method to place orders efficiently.

 

[d08]

This is already what I have now, getting the spread and calculating the offset based on it. But I much prefer a more native method which doesn't depend on the API.
Midpoint/relative orders are not visible. So unless I'm very wrong, they cannot move their offers because they don't know where I'm sitting at.

 

[Maverick2608]

Does the REL order type move up or down or does it only become more agressive until it fills?

 

[d08]

REL should move with the market.

 

[FreeGoldRush]

This is already what I have now, getting the spread and calculating the offset based on it. But I much prefer a more native method which doesn't depend on the API.
Midpoint/relative orders are not visible. So unless I'm very wrong, they cannot move their offers because they don't know where I'm sitting at.

If the order is sitting on the exchange as hidden then you should consider the costs and benefits of this. Exchanges are required to send an order to another exchange that is showing a better price. If you are hidden then the market will frequently trade thru your price. You will only get a fill if a customer were to route to the exchange where your hidden order is sitting. You will also not get exchange rebates for providing liquidity if you are hidden. The dynamics are complex but I generally find a hidden order that would otherwise create liquidity and get a rebate is best entered as a lit order. That's a broad statement to make and there are many factors that can influence this.