Which exchanges can handle spreads

[pbanerjee]

Can anyone tell me which option exchanges can handle spreads or complex option orders natively?

On IB, I find that whenever IB smart routing some of my spread / complex option traders to AMEX - I get a pretty bad fill no matter what I do. For some strange reason, IB never picks ISE for spreads / complex orders.

On Tradeking, they regularly use ISE for spread / complex orders and I get very nice fills, almost at mid prices.

Can anyone help me get some insight?

 

[rmorse]

Quote from pbanerjee:

Can anyone tell me which option exchanges can handle spreads or complex option orders natively?

On IB, I find that whenever IB smart routing some of my spread / complex option traders to AMEX - I get a pretty bad fill no matter what I do. For some strange reason, IB never picks ISE for spreads / complex orders.

On Tradeking, they regularly use ISE for spread / complex orders and I get very nice fills, almost at mid prices.

Can anyone help me get some insight?

The ISE and CBOE Complex Order Books are the most active. The PHLX COB is becoming more active. Unless your trading an option that do a lot of volume on PHLX and AMEX like RUT, I would stick with ISE and CBOE. Also, on spreads, I would never send market orders.

Remember, the complex order is not reflected in the legs of the spread. To get an execution, you'll need a market maker to electronically "see" the order or a customer to enter the other side of the order.

 

[pbanerjee]

Quote from rmorse:

The ISE and CBOE Complex Order Books are the most active. The PHLX COB is becoming more active. Unless your trading an option that do a lot of volume on PHLX and AMEX like RUT, I would stick with ISE and CBOE. Also, on spreads, I would never send market orders.

Remember, the complex order is not reflected in the legs of the spread. To get an execution, you'll need a market maker to electronically "see" the order or a customer to enter the other side of the order.

Thanks.

1. I didn't quite understand the "electronically see" part properly. On the ISE & the CBOE Complex Order Books, for spreads / complex orders, am I trading (a) against say a market-makers' algorithm or (b) am I trading against a person who is hired by a market-maker firm and this person "sees" the order on his screen/system and then tries to enter the other side?

2. Also, is the CBOE Complex Order book same as CBOE C2 exchange or is it different?

 

[FSU]

Quote from rmorse:


Remember, the complex order is not reflected in the legs of the spread. To get an execution, you'll need a market maker to electronically "see" the order or a customer to enter the other side of the order.

Too add, the spread can also "auto trade" with the markets on the screen in the individual legs.

 

[FSU]

Quote from pbanerjee:

Thanks.

1. I didn't quite understand the "electronically see" part properly. On the ISE & the CBOE Complex Order Books, for spreads / complex orders, am I trading (a) against say a market-makers' algorithm or (b) am I trading against a person who is hired by a market-maker firm and this person "sees" the order on his screen/system and then tries to enter the other side?

2. Also, is the CBOE Complex Order book same as CBOE C2 exchange or is it different?

1) Both A and B and also customers such as myself who are looking for spreads in the COB. The CBOE lists spreads on their web site as do some trading programs.
2) The C2 and CBOE are technically different exchanges, both having a COB

 

[rmorse]

Quote from pbanerjee:

Thanks.

1. I didn't quite understand the "electronically see" part properly. On the ISE & the CBOE Complex Order Books, for spreads / complex orders, am I trading (a) against say a market-makers' algorithm or (b) am I trading against a person who is hired by a market-maker firm and this person "sees" the order on his screen/system and then tries to enter the other side?

2. Also, is the CBOE Complex Order book same as CBOE C2 exchange or is it different?

I said "see" because it's very difficult to watch the COB for good trades, because what you see is of marginal value to a delta neutral trading strategy that scans for "value." So, firms that have the capability, electronically scan the COB for value and when their electronic eye see value they do a trade. CBOE and C2 are different exchanges with a different trading model, both owned by CBOE. C2 is good when you can add liquidity and get paid for it. Taking liquidity there cost money. Not all broker dealers pass on the debits and credits for trading on exchanges like C2.

 

[pbanerjee]

Quote from FSU:

1) Both A and B and also customers such as myself who are looking for spreads in the COB. The CBOE lists spreads on their web site as do some trading programs.
2) The C2 and CBOE are technically different exchanges, both having a COB

Regarding (1) above, does ISE also have a similar thing where one can see all the spreads for any particular ticker etc.?

Also, does any other exchange have a similar complex order book or system?

 

[rmorse]

Quote from pbanerjee:

Regarding (1) above, does ISE also have a similar thing where one can see all the spreads for any particular ticker etc.?

Also, does any other exchange have a similar complex order book or system?

You'll need a platform that will show current live orders and allow you to filter for what you want to see. They only platform I know of that does that is WEX. It's a professional broker neutral platform owned by Wolverine Trading.