IB - Options Market Maker

Discussion in 'Options' started by tyrant, Dec 25, 2007.

  1. tyrant


    I assume some of the experienced options trader here trade through IB? Or, maybe, they are with other brokers, I don't know. But for those with IB, how do you feel about maintaining an account with a broker belonging to a group who makes about 18% of the options market? I mean, if you have a really big account, like a big individual trader, or an institution, and assuming you tend to be profitable each year, wouldn't that be a loss to IB? I expect that they are on the other side of your trades on at least some of the trades? If your account gets too big and you are compounding your return every year, would that be a worry to IB at all? Can that result in them maybe making a less favourable market for you? Or, in any other way, discourage your trading with them? I ask because I have never come across a broker who happens to be also a big market maker, and think that there might be a conflict of interest here? Sorry if my concern is naive.
  2. sugar


    I'm trading with IB and I'm not worried about their market maker condition.

    You know that if you fill the MM spread you're doing a good business... for them. They'll always buy low and sell higher. It's a pretty clear deal.

  3. they make most of their profits from trading. retail brokerage is just a hobby for them. ya should be worry.
  4. Market makers don't lose money when you make money. They are not playing a zero-sum game.

    They make money every time you trade, both as a market maker and a broker, and it is always in their interest to make a market that will encourage you to trade more in your account.
  5. rosy2


    every broker/bank has a market making operation. I would bet that 99% of IB clients lose money anyway. Besides, IB (timberhill) was highly automated since at least the early 90s...there pit traders were referred to as monkey traders (fillers).
  6. Steve_IB

    Steve_IB Interactive Brokers

    14.85% of Interactive Brokers Group Option Orders Received Price Improvement
    The Interactive Brokers Group (IBKR) is pleased to announce that during the first half of 2007 it received price improvement on 14.85% of its customers’ marketable US options orders vs. the industry average of 0.57% according to statistics provided by The Transaction Auditing Group (TAG) of New York, NY, a third party provided of transaction audit services.

    “Our singled minded focus on building SmartRoutingSM technology, lowering commissions, and creating option trading tools that give our professional customers a competitive edge in the markets helps to explain why IBG executed 19.3% of North American options during the first half of this year” said Steve Sanders, Interactive Brokers SVP of Marketing and Product Development.

    Those interested in finding out more about Interactive Brokers’ SmartRouting technology, ultra low commissions, combination order execution guarantees, market-maker designed trading tools, and protection against exchange outages should visit www.interactivebrokers.com.

    About Interactive Brokers
    Interactive Brokers Group, Inc., together with its subsidiaries, is an automated global electronic market maker and broker specializing in routing orders and executing and processing trades in securities, futures and foreign exchange instruments as a member of more than 70 electronic exchanges and trading venues around the world. The company provides professional traders and investors with direct access to stocks, options, futures, forex and bonds from a single IB Universal AccountSM. Employing proprietary software on electronic exchanges worldwide, Interactive Brokers is continuously integrating its software with a growing number of exchanges and trading venues into one automatically functioning, computerized platform that requires minimal human intervention.

    Interactive Brokers LLC is a member of NYSE/NASD/SIPC.

    Options involve risk and are not suitable for all investors. For more information read the “Characteristics and Risks of Standardized Options”. For a copy call (203) 618-5800. Supporting documentation for any claims and statistical information will be provided upon request.