is there marketmaking functionality with interactive brokers? or do you need to use another software?
No, not in the traditional sense. You cannot have a "live" simultaneous bid and offer on any option contract, but that's not an issue with any specific broker, as it's a mkt regulatory issue to protect registered MMers. But it's very easy to dump the live-feed into excel and make synthetic markets; i.e., put vs. call flies; iron vs. put(call) flies; call vs. put calendars, etc. For example, you can be 3.20 bid on an NBBO 3.00x4.00 call calendar and 3.80 offered on a 3.00x4.00 put calendar at the same strike. It can also be accomplished ghetto by detaching individual TWS quote pages and running one page with call-spreads/combos and one page with puts. Or iron vs. natural on individual pages, etc. It's very easily accomplished on the TWS front-end. Most of the (unreg) upstairs MMers that I know babysit a few tickers and run quote-matrices of natural vs. synthetic market-making so that they can have simultaneous working orders to go both long and short an equivalent position.
elite...have you ever used Involatility? Wanted to look into it and was hoping to find some that have used this service before.