You are not allowed to cross a U.S. listed options transaction w/o making the quote available for public execution on an exchange. My statement is ONLY for US listed options. There is no concept of putting it on the tape in options as with equities. Actually, you can hear the Citadel (options MM / 10% daily US options volume) Execution Services president (Matt Andresen) commenting about this very topic: http://www.iian.ibeam.com/events/thom001/22466/ (The ATS session, starting at time marker 23:38) "The idea you can quote unquote internalize it [order flow].... Options is not equities.... The first is, there is no such thing as internalization in the options market. In the equities market, I can do a trade... I'm going to fill it out of my own inventory. That's a real trade. It's done. All I have to do then is hand around [sic], turn around and print it to an exchange. There is no such mechanism in the options market and none will be contemplated in the regulatory environment. So if you want to do a trade in the options market and you have a 10 contract order, you have to send it down to an exchange. And you can't tell your quoter that it is coming. There is a complete wall there... If you're looking for the ease of internalization, it's much much harder because of that.... The only way you're able to interact with that order is if you have an out-loud quote in the marketplace available not just to your internal flow, but also to Goldman Sach's prop desk" So his statement is stronger than even my assertion was. I didn't realize that the Chinese wall is required by regulation, so that you cannot send a matched pair of orders from customer and from your internal desk bec your internal desk is not allow to see the customer quote.
Its very simple... as I said when the market in xyz options are 1.40 / 1.55.... in order to do the cross they simply bid 1.41 or offer 1.54 and then hit the bid they showed or lift the offer they showed. It happens continually all day long every day.
I agree that IB is the broker to use if you are a experienced trader. Great execution and usually good fills on options orders.
Dear traders, I hope anyone could help me, I have asked the permission to IB, here is my filling net worth 113000 liquid net worth 51029 annual net income 46100 source of funds = savings I have asked permission to trade options, and this is the email i got "Customer does not qualify for Option upgrade based on revised financial information." Thus, this will not be approved for your account. Any idea, what should i do? Thanks before for your assistance.