Does The Number Of Contracts Effect Filling?

Discussion in 'Options' started by Arnie Guitar, Jun 28, 2011.

  1. Does a limit order for 10 contracts stand a better chance of getting filled than an order for 9 or 11 contracts?

    Also, are orders filled in the order they were received, or is it random...say if two exact same limit orders were placed 5 minutes apart, does the earlier one get filled first?
  2. rmorse

    rmorse ET Sponsor

    9,10,11....should not matter.

    To my knowledge, customer orders are time order priority. First order in will be filled before second order gets executed.
  3. Thank you.
  4. Actually, getting fast fills may be a matter of matching orders unless they are at the natural bid or ask. If you deal with a broker like thinkorswim or IB, you can be matched internally by the broker. In that case, round numbers are a bit more likely to be filled. Smaller numbers are also slightly easier to fill than larger numbers depending on the liquidity of the options.

    When I trade SPX, I often get better prices and faster fills on 5 lot condors than on 10 lot ones. Sometimes, you will not get a fill on a 10 lot at all, than reduce the size to five and it fills right away.

    A person who trades options regularly in a particular issue will get a feel for what a decent price is for a certain kind of spread. For instance, I do a lot of condors on the SPX. Sometimes I will see thinkorswim display a certain price as a midpoint price and I will say to myself that is not a good deal. I'll then offer less than the mid, and still it will fill anyway because it is the right price or someone else will offer up for it seeing the same divergence.
  5. I trade credit spreads with ToS. I frequently get partial fills. Is this not evidence that order size is irrelevant in this circumstance?

    Today, for example, all but 2 contracts in my order were filled over several minutes. The priced moved away from my limit, so I changed the order to get the last two.
  6. If you're trading multi-legged positions at a limit price better than the natural, fills will be somewhat harder to get on larger positions because more things have to line up to get that price. So condors and flies etc. may be tougher to fill than 2 legged verticals, diagonals, etc.

    There's no magic sauce. If someone is there on the other side at your price, you get all you can eat. If not, you get the small appetizer :)
  7. From what I've read and experienced, they're first-come-first-serve at each exchange. If I'm the first to put in a lower offer at CBOE, say, and the MM at PHLX drops his offer to be the same as my offer, then a trader whose broker only does business with PHLX may get the trade filled there rather than trade with me. In fact, they may get filled at PHLX even if the offer there is worse than mine. A rep at Ameritrade told me they do not guarantee an option order will be filled at the best price.
  8. My understanding is that:
    1. Each leg may be filled by a different supplier.

    2. If the price of the combo is right, the price of each leg is irrelevant. I would think that this adds flexibility in fills.

    3. If the price of the combo is not good, fills will be problematic irrespective of the number of legs.

    Am I wrong here?
  9. 1) Where it's filled is irrelevant. Price is the issue.

    2) Yahhh, net price is the issue not component price.

    3) Suppose you're trying to split the bid. Do you think a 2 legged position is easier to fill than a 4 legged position? Or vice versa? Or the same? I think 2 is more likely to be filled but that's merely an opinion and I'll not argue the point.
  10. A bit off-topic, but what are your commissions at TOS? They are very expensive except in the case of small volume combined with no ticket charge pricing. I was playing around with their paperMoney selling IWM strangles in 20-50 lots. Over the course of a few months I was up about $5K in profit, but the commissions almost completely wiped that out. And that is at $1.50 per contract with no ticket charge.
    #10     Jun 29, 2011