Actually I tried today to send a several hundred lot order on some option listed in Canada with TWS but was told by the system that the limit is 100. Quite surprised, shall I go to my tws to change the setting or one has to call them, or there is no way for non us listed option to send more than 100 lot order at a time ? The Block order is only valid for US stocks btw.
https://institutions.interactivebrokers.com/en/index.php?f=979 That's the link to broker assisted orders with IB, mentionning specifically large or complex options orders. Anybody use them, are they useful in non US markets ?
Call IB tell them You want to place a 500+ lot option order and they will find someone to make the market for you. IB has it's own market making firm timber hill as well. Unless you planning on taking it for a longer term swing stay away as you won't be able to trade out of the position with them watching you. If it's long term swing trade just buy up everything on the offer periodically and build into position. Why you would want to trade huge size in an illiquid option is beyond me.
Thanks Zachary, useful input. I'm talking about swing trades btw, options look particulary useful on stocks for which IB require additional margin. Besides I'm also curious on getting a better understanding of execution possibilities as my capital at risk in financial markets grows bigger and so do the positions I enter.
Also when one gets a quote on the phone, is it "take it or leave it" or can one offer a few cents away ?
You certainly don't have to cross bid/ask, but if your order isn't particularly large they're probably not going to be inclined to shop it too hard. What is likely is that they will enter it into the complex order book as a resting order at your price, and announce it to the trading crowd if they have someone in the pit, as well as any upstairs traders who have indicated interest in that name. It's possible that there is undisplayed liquidity at your price, so it rarely hurts to walk your orders down.
In my insane days of buying giant blocks of Options I would use a Reserve Book showing 200 Contracts and wait until they would get hit, when a stock is moving fast upward, you can get out of those contracts 2000 contracts but it's best to work your order out manually on a high flying stock. I watched a Trader unload 3 blocks of 15,000 contracts by using 500 share Reserve Book, these were not prearranged because I bought 2000 contracts from this seller. I was confused why this Options seller was dumping these contracts hard even though the price of the stock had great volume and was going to blow past $16.00+ in my mind (At $15 he started to sell all those contracts) and it took the physical stock to hit $17.5 before all his contracts were dumped. Why did he unload so many contracts at $2.00 $2.50 and $2.75 This nutty stock did hit $21.00 and I sold my contracts at 200 a pop at various prices on the upward madness. I thought there must be a reason why somebody would dump that amount of contracts so I emptied out everything because I was nervous he knew why he was selling. I was wrong, stock kept going up the next day to $25 and past $30, one of those real examples of why did that seller dump all those contracts and should I have allowed his dumping to taint my thinking? That was a few years ago but I still see when big dumping takes place, often the stock craters so the 3 out of 10 that continue moving upward don't steer my mind away from following the Giants and their moves. I hope this is what you were thinking about when you were asking how the Big Giants like the 45,000 contract seller worked his position out.