Equity options. Let's say, I'd like sell October $100 calls and buy October $110 calls on a single-stock options. (bear call spread). Not sure, probably on CBOE but I'm using IB's smart router.
There is no such thing as 'hidden spread order' in the US options market. And yes, Market Makers can see them.
I tried using hidden complex orders with IB but they rarely get fills as they are hidden from exchanges. You’ll usually see green or blue status with tooltip “active on Smart”. They won’t be submitted to exchanges until the asking price (worst bid/ask) reaches your limit. I’ve compared them to standard displayed orders and hidden ones got fills after the displayed ones. If I want a decent price then I never get filled. But I rarely trade vertical spreads so my orders were little more complex: ratios, calendars, diagonals. Not sure if verticals are treated any differently.
If the spread is actually sent to the COB rather then being held by IB (until they think it is marketable) the spread can be viewed in the COB by both MM's and customers. There are no "hidden orders" in the COB, it would have to be held by the broker.
There is hidden liquidity on many of the exchange. No hidden orders, but it might make sense to ask your broker to book the order. Hidden order implies they are holding it "upstairs" on their servers. Ask yourself who that benefits? Spreads are not price protected on the individual legs. You can have a trade through a protected price to fill the spread and it would show on the tape as a spread. Generally, unless you want the spread hidden you should consider getting it booked especially because it can fill via trade through. If it is a fairly liquid name or a multiple traded name why would you hold it upstairs? Hint(the answer may lie in their economics).
Yeah, I can't see many situational where not publishing to the COB is in your best interest as a trader. You'll nearly always be able to get closer to the mid in the spread than if you let IB hold it, and I'm not sure there's any situation you'd do worse unless you're doing market moving size?
Lot's of hidden liquidity via preferencing or directed orders depending on which exchange they are both pretty much the same thing. They live on the smart routers so they are broker specific. Not supported by every exchange, but some members of the various exchange groups will. Broker specific so ask your broker. When you look at a firm's 606 you will see there are very few directors order - but the big reason for doing a directed order is try to get size.