creating options credit & debit spreads

Discussion in 'Retail Brokers' started by copa8, Apr 6, 2004.

  1. copa8


    hi all,

    would appreciate your instructions/advice on how to create options credit and debit spread orders in IB TWS. i tried following their online directions, but it's not helping. i guess i'm technically-challenged, since i'm used trading them using ameritrade & optionsxpress.

    thanks alot in advance!
  2. alanm


    Perhaps you can post what exact spread you are trying to enter, what you tried to do in TWS, and what went wrong?
  3. copa8


    e.g. i want to do a bearish credit spread
    sell KSS july 45 calls @4.00
    buy KSS july 50 calls @1.80
    net credit = 2.20

    do i enter each leg of the trade on separate lines, thus do two trades - a sell & a buy? can't seem to find the commands for letting me to enter both legs at once, like ameritrade for e.g. sorry if i seem too simple, but just started using IB after having used ameritrade for 6 years.

  4. Here's a screenshot of how a spread order is placed in TWS. Unfortunately, you can only send spread tickets to the ISE, and the spread markets are typically thin and wide. Straddle markets seem to be the tightest.

    You can spread/combo a large variet of spreads; including arbs(conversions/reversals).

    It's nothing like what you're used to with Ameritrade, no function for sending spreads/combos to a physical exchange.

  5. thin and wide? LOL

    thin(volume) wide(bid-offer)

  6. copa8


    thanks for the reply riskarb. i guess i would need to create a template in order to do the spreads? if not then, how can i get to the screen shown on your attached pics?

    thanks again
  7. syd697



    Here's how you create spread orders in TWS:

    1. Type in KSS in a blank row
    2. select "combo" from the drop-down menu
    3. select "smart" exchange
    4. a "combination selection" box will open up on your screen
    5. on the "by template" tab, click the drop-down arrow next to "strategy" and choose "vertical spread"
    6. click the drop-down arrow and choose "sell combo"
    7. put in your lot sizes, expiration months, put or call preference, and then which strikes you want
    8. make sure you put a check mark in the box that says "request market data for legs"
    9. click "ok"
    10. a new line should be created in your TWS now that gives a bid/ask for the whole spread, plus you will also have each leg of the spread created for you underneath the spread quote.
    11. since you want to sell the spread, just click on the bid of the spread line quote and enter your new price if you want to sell at better than the bid

    good luck
  8. copa8


    to syd697 (and other members),
    exactly what i needed...thanks very much for your help/instructions!