Backing Away

Discussion in 'Options' started by the_dude, Mar 20, 2002.

  1. Just21,

    If that question was directed to me, 10 to 50 lots. We get faded more than we get filled.
     
    #11     Mar 20, 2002
  2. just21

    just21

    Which exchanges do you have the problem with? Are you trying to leg spreads or taking a view?
     
    #12     Mar 20, 2002
  3. All of them, all for different reasons. We leg into everything.
     
    #13     Mar 20, 2002
  4. just21

    just21

    I suppose it will get better for the top 100 shares when IB's Boston options exchanges starts in the fourth quarter.
     
    #14     Mar 20, 2002
  5. def

    def Sponsor

    Calling IB for an audit trail on this will do nothing as I assume what the specialist did with your order was legal - especially since it traded 10 cents higher. The problem is the US option market making system and the technology or lack thereof in open outcry trading. Some of the exchanges flag their autex systems as on but the specialist may have it off. On the ISE there are a few firms that honor their quotes all the time for all parties. However, there are some primary market makers who don't. If you are trying to hit a crossed market on options, odds are if it is not the ISE, your order will not be filled.

    the BOX exchange that IB is backing is supposed to act like other overseas exchanges. No priorities for anyone. Orders on the screen must be honored and orders are filled on price time priority. Hopefully it will succeed in either pressuring the other exchanges to treat all parties fairly or succeed in its own right.
     
    #15     Mar 20, 2002
  6. Interesting discussion. Could someone please explain to me what is meant by a "locked" or "crossed" market? Don't all options exchanges have their version of an automated execution system such as CBOE's RAES (Retail Automated Execution System)? So long as you trade no more than 20 contracts in an order aren't you guaranteed a market on the CBOE (I don't no the limits on the other exchanges)? Thanks.
     
    #16     Mar 20, 2002
  7. def

    def Sponsor

    The problem is that the exchanges do not always have their automated systems turned on. (they even may report they are on when they aren't as well)

    crossed/locked market: bid on one exchange is greater/equal to an offer on another exchange.
     
    #17     Mar 20, 2002
  8. I think if the BOX honors all their quotes, regardless of the posted quotes on the other exchanges or the whether it is a retail account or a B/D, they will end up with so much market share that the traditional exchanges will be forced to trade on their posted quotes in order to survive.

    One can dream.
     
    #18     Mar 21, 2002
  9. I don't see why not...the BOX slogan could be "trade here, we don't suck." That may help things change. :D
     
    #19     Mar 21, 2002
  10. Just remember though that since everybody is treated with parity, there will be no more 10 up (or 20 up or 30 up, etc.) guarantees for customers. Instead it will be what you see is what you get.
     
    #20     Mar 21, 2002