Question about options execution method?

C

Con1991

Fellow options traders. I have been trading options for some time now with mixed results. My current brokerage is Firstrade. I like to mostly trade around mid price for entry and exit, because it is simply cheaper.

However with Firstrade I am finding it difficult to achieve fills at mid price, especially on option spread strategies such as Verticals, Butterfly, Condors etc. Sometimes I can get filled at mid on entry, but then when trying to close at mid again the order sits and never fills. Also, Firstrade does not allow GTC orders for options spreads, which is frustrating.

My question is, is it possible at all to buy or sell an option at mid, and then buy sell at ask or bid thereafter to close the position? For example if I buy a Butterfly option on SPX and get filled at mid price, could I then sell this position at the bid price?

Thank you
 
No. There you go.

if you're filled at mid it's bc the mkt moved against you and you're too ignorant to realize or understand.

Stick to the moronic DITM index calendars that made you patient zero with every decent vol-broker in town.
 
Con1991 said:
Fellow options traders. I have been trading options for some time now with mixed results. My current brokerage is Firstrade. I like to mostly trade around mid price for entry and exit, because it is simply cheaper.

However with Firstrade I am finding it difficult to achieve fills at mid price, especially on option spread strategies such as Verticals, Butterfly, Condors etc. Sometimes I can get filled at mid on entry, but then when trying to close at mid again the order sits and never fills. Also, Firstrade does not allow GTC orders for options spreads, which is frustrating.

My question is, is it possible at all to buy or sell an option at mid, and then buy sell at ask or bid thereafter to close the position? For example if I buy a Butterfly option on SPX and get filled at mid price, could I then sell this position at the bid price?

Thank you
More...
Your execution price isn't going to be much different in the SPX with whichever broker you use.

SPX options area single listed on the CBOE. All your spread orders are likely just sent into the exchanges COB (complex order book). Your single orders will all be sent to the CBOE as well. Your fills will depend on how aggressive the MM's are running AIM (automatic improvement mechanism) and COA (complex order auction). Sometimes you will get the midpoint, sometimes better and sometimes worse.

With equity options, your broker can matter. Which exchange your order is sent to (they have different models on charging for liquidity,) and who buys the order flow can affect your fill.
 
Con1991 said:
Fellow options traders. I have been trading options for some time now with mixed results. My current brokerage is Firstrade. I like to mostly trade around mid price for entry and exit, because it is simply cheaper.

However with Firstrade I am finding it difficult to achieve fills at mid price, especially on option spread strategies such as Verticals, Butterfly, Condors etc. Sometimes I can get filled at mid on entry, but then when trying to close at mid again the order sits and never fills. Also, Firstrade does not allow GTC orders for options spreads, which is frustrating.

My question is, is it possible at all to buy or sell an option at mid, and then buy sell at ask or bid thereafter to close the position? For example if I buy a Butterfly option on SPX and get filled at mid price, could I then sell this position at the bid price?

Thank you
More...

You should be able to be filled at mid-price when opening or closing an option trade. I don't know why you would experience such a hard time getting filled even on mid-price for closing trades. My only guess would be either there are some technical issues with the broker's platform in that it's not routing the orders in a timely manner or the PFOF dealers of the broker might not be executing the trades as efficiently as they should. This delayed execution is often seen in retail forex when it utilizes the market-making model where your trades are executed directly by the broker itself. PFOF is not that drastic but its payment for orderflow still allows them to be the direct executor of your trades.

It is also quite strange that your broker does not allow GTC orders which is standard for any option trades. So you are only allowed to have the order open until market closing time at 4:00 PM EST?

If I were you, I would change broker. I have never heard of this broker. Might be a small broker and might not as well capitalized as other brokers.
 
TheDawn said:
You should be able to be filled at mid-price when opening or closing an option trade. I don't know why you would experience such a hard time getting filled even on mid-price for closing trades. My only guess would be either there are some technical issues with the broker's platform in that it's not routing the orders in a timely manner or the PFOF dealers of the broker might not be executing the trades as efficiently as they should. This delayed execution is often seen in retail forex when it utilizes the market-making model where your trades are executed directly by the broker itself. PFOF is not that drastic but its payment for orderflow still allows them to be the direct executor of your trades.

It is also quite strange that your broker does not allow GTC orders which is standard for any option trades. So you are only allowed to have the order open until market closing time at 4:00 PM EST?

If I were you, I would change broker. I have never heard of this broker. Might be a small broker and might not as well capitalized as other brokers.
More...
Thank you for your input, very interesting points you make here. I have only been with two options brokers so far, Tastytrade and Firstrade. Both use Apex for clearing trades. I had the same difficulty getting orders filled at mid on Tastytrade, and I only ever had one trade fill on exit for a profit with them, before they banned me for trading 'too deep ITM options'. So I shut my account down there. Moved to Firstrade around two months ago, and my experience so far has been terrible. Yes it is very strange that they do not allow GTC orders, they have many other limitations too. Another one is the credit received in credit spreads is not applied when opening, but rather treated entirely as collateral on a trade. In other words if SPX credit spread of strikes 5,000/5100 is traded, (10,000) and credit received is say 9000, the full $10,000 is required as opposed to just $1,000 that other brokers would require.

Firstrade was first established in 1985, nearly 40 years ago. But they are not as fleshed out as the big brokerages unfortunately. I agree with your point about mid price should be filled in most cases, especially since I am only trading index options right now. Something else must be going on. My orders are just sitting there waiting to be filled, one for days, and the other for about two weeks now. I am seriously considering changing broker tbh.
 
TheDawn said:
You should be able to be filled at mid-price when opening or closing an option trade. I don't know why you would experience such a hard time getting filled even on mid-price for closing trades. My only guess would be either there are some technical issues with the broker's platform in that it's not routing the orders in a timely manner or the PFOF dealers of the broker might not be executing the trades as efficiently as they should. This delayed execution is often seen in retail forex when it utilizes the market-making model where your trades are executed directly by the broker itself. PFOF is not that drastic but its payment for orderflow still allows them to be the direct executor of your trades.

It is also quite strange that your broker does not allow GTC orders which is standard for any option trades. So you are only allowed to have the order open until market closing time at 4:00 PM EST?

If I were you, I would change broker. I have never heard of this broker. Might be a small broker and might not as well capitalized as other brokers.
More...
Oh by the way, I forgot to mention in my last post that Firstrade are also a zero commission broker for stocks, options, funds etc. So PFOF is their main source of income, which I believe directly impacts fills for retail customers.
 
Con1991 said:
Oh by the way, I forgot to mention in my last post that Firstrade are also a zero commission broker for stocks, options, funds etc. So PFOF is their main source of income, which I believe directly impacts fills for retail customers.
More...

You should switch brokers. They aren't sophisticated enough for you.
 
Con1991 said:
Oh by the way, I forgot to mention in my last post that Firstrade are also a zero commission broker for stocks, options, funds etc. So PFOF is their main source of income, which I believe directly impacts fills for retail customers.
More...

Yup I think it's the broker and their PFOF dealer that are the problem. They trade against you the same as retail forex brokers do the way I see it. When it's zero commission, the broker/dealer make their money in spreads and after paying the PFOF dealer, the broker probably had no money to be made unless they widen the spreads so that is most likely the reason why your order is not getting filled at mid-price. I trade SPX options as well and I never have problems getting my orders filled at mid-price, opening or closing. Sometimes when I am lucky I even had my orders filled at bid for buy and ask for sell.
 
Con1991 said:
Thank you for your input, very interesting points you make here. I have only been with two options brokers so far, Tastytrade and Firstrade. Both use Apex for clearing trades. I had the same difficulty getting orders filled at mid on Tastytrade, and I only ever had one trade fill on exit for a profit with them, before they banned me for trading 'too deep ITM options'. So I shut my account down there. Moved to Firstrade around two months ago, and my experience so far has been terrible. Yes it is very strange that they do not allow GTC orders, they have many other limitations too. Another one is the credit received in credit spreads is not applied when opening, but rather treated entirely as collateral on a trade. In other words if SPX credit spread of strikes 5,000/5100 is traded, (10,000) and credit received is say 9000, the full $10,000 is required as opposed to just $1,000 that other brokers would require.

Firstrade was first established in 1985, nearly 40 years ago. But they are not as fleshed out as the big brokerages unfortunately. I agree with your point about mid price should be filled in most cases, especially since I am only trading index options right now. Something else must be going on. My orders are just sitting there waiting to be filled, one for days, and the other for about two weeks now. I am seriously considering changing broker tbh.
More...

Yup I would definitely change brokers if I were you. Do it asap if you can. Not worth it to trade with PFOF brokers when they are acting like market makers in retail forex. Trust me from somebody who traded with market makers in retail forex, you won't make any money.
 
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