Thanks Mav, so I guess I'm confused when Murray says that the floor broker "isn't your friend". If he earns a commission by facilitating your order he "should" be your friend...ie working for not against you....correct?
SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Yes, correct, the floor broker is your friend, the crowd (market makers) are not your friend. If the broker does not get you good fills, he loses your business. It's actually a pretty high stress job for him.
To me, the answer is clearly: "yes".
A broker who works the order can enter the crowd, see what other orders are present (including spreads), speak with and bargain with the market makers and has a reasonable chance to get a good fill for you.
An electronic order just sits there. If anyone wants to take the other side, you get a fill. Otherwise it just sits. Not good.
I wrote to IB and they do not allow broker-assisted trading. That means cheap commissions - but I am reconsidering whether it's worth it. Until recently, I was able to get MID, or close, on spread orders - and that was satisfactory. That's no longer true. The fills are simply bad.
Anyone: I hear TOS works your spread orders. Is this true?
Mark
You will rarely ever get good fills on spreads in electronic markets.
Yes, if you do decent volume you can have someone call the order down to the floor. When I traded SPX spreads with ToS and since I did some volume, I had a guy from ToS who I would call who would then call the floor to get the actual bid/ask spread (which is much tighter than what is shown in the composite quotes) and a realistic idea at what I could get filled at and they would place the order for me. (Lucky for me the guy I was talking to, his brother worked on the floor and that is who he would call)
I am sure they could do the same for RUT as well as SPX. If you are doing 5 or 10 spreads I do not think they can help but if you are doing like 50+ I believe they can. I forgot who I called to find that out originally but yo ucan ask the trading desk.
I am sure they could do the same for RUT as well as SPX. If you are doing 5 or 10 spreads I do not think they can help but if you are doing like 50+ I believe they can. I forgot who I called to find that out originally but yo ucan ask the trading desk.
Well, the problem with just straight call or put buys and sells its hard to tell if your fill is good or if the mkt moved and gave you a bad fill. If the Feb 1440 call is 14.00 at 15.00 and you are bidding at 14.50 and get filled a few minutes later is that a good fill? Probably not because the sp traded lower and the market is now 13.50 at 14.50. So getting a good fill is usually just your deltas moving against you.