I will add even further that you can access the "actual" ISE spread order book on TOS and actually "lift" a "real" market there. You will notice the bids and offers on the actual spreads differ from what TOS shows you as the natural spread. Just a little fyi.
Sure you can send a spread order to the exchange. There is no requirement for a market maker to fill it. This guy is sending what he "thinks" is a marketable order. That is where the breakdown is here. TOS is NOT showing you the real spread market. They are doing a mathematical calculation on what the spread could be if you hit the bid and lifted the offer or in this case on a straddle, lifted both offers. The problem is many times a small order comes in and throws off the spread market and rarely is someone going to fill you. In fact, I'll one up that by telling back in the day what I tried to do is be that one lot! If I was trying to fill a spread on a 20 lot, I would bid a one lot on one of the sides to move the spread market hoping to get filled on the spread! No such luck. However, my one lot always got filled. LOL.
If the spread is sent directly into the COB on the CBOE, and it can be filled on the quoted markets on that exchange, it will auto-trade with the given markets. This is not the case if you see the best bid or offer on another exchange.
Right. That is true anytime you enter a marketable order on a spread book. That is not what he is doing.
Maybe I misunderstood. The OP entered a spread order that he felt should have been filled by simply trading on the best quoted markets in the individual options. If this was the case and these best quoted markets were on the CBOE, if the spread was entered into the CBOE COB, it would automatically take the options from the quoted individual markets. Was this the case, or did I misunderstand the OP?
No, he did not enter a spread order on the COB at CBOE. TOS allows you to enter a spread market on just about anything. It could get routed to the COB but only if he "sends" it there. Same with ICE. You can simply enter a spread order and smart route and let TOS send the order for you. Are you really a Seminole?
Lol, Yes. Does TOS give you the option of sending a spread to the COB of a certain exchange or do they make that decision for you?
Gator here. Chomp chomp. You can access the ISE spread book on TOS and as far as I know you can direct spread orders to CBOE.
When I tried to access the ISE spread book for AKAM when the market was open, I didn't see any orders in there.