Smart Order Routing suggestions for Options

Q

qlai

Hello, I use resting limit orders and don't move them during the day. Obviously, I want to get the best rebate, but not if the fill rate is going to be awful. Any suggestions which choice from below is a good balance? For socks I use "Highest Volume Exchange With Rebate" which usually goes to Nasdaq, but no such choice for Options.

Thanks!

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You’re only able to choose from SMART routes?

You should be able to choose your own route, you don’t want to select SMART if you want a rebate. SMART will just send it to the best route at the moment

Since you’re not getting in and out it doesn’t really matter for you so find your rebate route on your broker website then route to that directly
 
Good point :) I am able to choose, so which one should I choose? CBOE? I should mention that I trade 1-4 contracts per order on liquid contracts, so size is not an issue.

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qlai said:
Good point :) I am able to choose, so which one should I choose? CBOE? I should mention that I trade 1-4 contracts per order on liquid contracts, so size is not an issue.

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look on ur broker website it will tell u which one rebates the most. Then choose that one. Ur brokers different than mine I have totally different routes
 
But I also want to make sure I actually get filled, especially on short lived spikes, so I want routes which has good volume.
 
If there is a better market away your order could ship under linkage away from your preferred route. So the possibility of not filling is reduced, but not eliminated.
 
AR15 said:
You’re only able to choose from SMART routes?

You should be able to choose your own route, you don’t want to select SMART if you want a rebate. SMART will just send it to the best route at the moment

Since you’re not getting in and out it doesn’t really matter for you so find your rebate route on your broker website then route to that directly
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But you need to be careful. IB will play a trick on you. When they see you send your order to a specific route, what it will do is it will hold your order on its server claiming the price is not there and then it will only send it when the price is there and many times it ends up as a market order and you end up paying a huge exchange fee because you are removing liquidity. I have disputed with IB so many times regarding this and they refused to rectify the situation. It used to be a huge problem when I was trading VIX products.

With options, there is not even any choices in smart routing besides Smart MaxRebate so I just don't trade much with IB.
 
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