For both futures and stocks options? Just asking - I do not know. It is probably not necessary in many cases. I think if you set up a quote line each way (smart routed and directed), in some cases you can see a narrower bid and ask in directed and you can make a choice......that was my experience with futures options but of course IB's smart routing is constantly being tweaked by them.....
That is true but you have an opportunity to buy your spread at a better price from a trader outside the IB system. That better price would save you much more than the commission. You can enter orders with smart routing that are mid market or worse and use DMA for orders outside that. Worth a try.
Just curious, I very seldom have a spread filled at better than midmarket via IBs smart routing. How was your luck with that? Thanks.
If this is true it would be a great disadvantage. Orders entered into the CBOE COB are filled FIFO. For example many times I may see a spread trading in size, I will put a bid in the COB at a lower price, know if the seller comes down, I will be filled first, even over the market makers. It may appear that my spread is not marketable, but in fact it will be if that large seller comes down in price. If my spread was held away from the COB, the fill would simply go to a market maker.
You will get most of your execution in the COB from electronic market makers looking for value. They won't hit your bids or take your offer unless at that second it makes sense. If you're bidding or offering, you might get lucky with common spread like a vertical and calendar spread when some one enters an MKT order. Remember, very few players watch the book like FSU. Most scan electronically with values preset. You can also get a large institutional order placed in the book while they shop it upstairs and get to play that way. You just can't see it.
Like others have mentioned; more info is needed. What type of trader? (pro, customer, etc) Any other products besides options? Do you require any sort of analytics, what-ifs, etc? Commissions? How much capital are you working with? IMO with options commissions are of primary importance. Anything else can be added ad hoc.
Yeah, IB charges $0.70 per contract for volume <=10,000 contracts per month. If you are trading this that type of size, you probably won't do much better. Once your volume picks up you'll have room to negotiate with most brokers. IB is probably the most suitable for a wide array of traders due to the breadth of products offered.