We may have identified at least two brokers (who charge you one time fees of maybe $8-15), that when you place an order to buy equity options at bid, you get one contract fills quite often, and end up paying a lot on commissions; while with a third broker, we have not seen this happen at all. Has anyone else had this experience with a particular broker over another?
Partial fill generally doesn't increase commissions, unless you cancel/modify the order in which case it is viewed as new order.
Actually, each day is viewed as a new trade. Also, if the option prices fluctuate a bit, he will modify his orders intraday as well.
That's a good reason to stick with single-contract-minimum brokers. Historically, option brokers only charged you one minimum ticket fee per instrument per day, no matter how many modify/partial/CxR/etc. you did. Waterhouse was like this even through the mid 90s.
As an alternative, maybe it's not the broker, but MM's or specialists selling options who can identify you as a retail client of whatever brokerage, and want you to "give up" your place in line. I would love if someone who really knows can verify any of this, because it could be it's all mistaken (e.g maybe it was just a higher concentration of computerized trading done on an experimental basis during that period of time). Meanwhile, I am not identifying the broker(s).
Quote from Option Trader: As an alternative, maybe it's not the broker, but MM's or specialists selling options who can identify you as a retail client of whatever brokerage, and want you to "give up" your place in line. MMs rarely will hit/take a retail order that is resting on the bid/offer unless they really need to balance their position, or it is mis-priced (i.e. the underlying moved or there was a change in the greek profile). In that case, I doubt very much that they care who is on the other side of the trade. If I'm bidding/offering, the only way I expect to get filled is in the above case, or if another retail order attempts to hit/take the bid/offer with auto-ex turned on, and I'm first in line. Those retail orders are often for small/odd lots (e.g. 1, 3, 5, 6). This happened to me pretty routinely when trading options from the bid/offer. Partialling me doesn't change my priority, either, unless I change the order.
it won't be the specialist or mm, they are not in the business of giving away money, neither will it be the broker, they are not responsible for the execution. You're getting paranoid Execution follows a very strict proces depending on the rules of the market in question. Normally execetion is first in first out, although on some us-exchanges retail has priority over mm. Exceptionally you get alloted according to the size you are posting on the bid or offer.
What I mean is that retail traders get priority in line before MM's, and they don't like that, so as a wild speculation, they take the other side of the trade, coordinating this small trading activity to the detriment of the retail traders who are first in line. BTW, with another broker (not IB) who doesn't have a minimum ticket charge this last week, I have had orders to buy 50, 70, 100, and 50 to go through (buying at bid) without any of the smaller orders going through.
Rest assured it's not the MM, they think in terms of volatility and the spread, selling the bid would be losing money for them and accomplishing nothing.