IB's Option Trader should have the ability to set a limit order that is based on the mid of the bid and ask or %above / below bid ask , WHEN a condition is met, eg if spy reaches 161, an option leg or spread, can have it's order transmitted to buy or sell, at limit, based on the mid between the bid and ask of that spread or %above below bid ask, eg a vertical spread (0.20 0.23), can set up an order to buy this vertical spread at mid point, when Spy touches 161.10. currently can't do AND would have to set up a conditional market order which can be expensive esp for index options like OEX. This is a significant money saver, eg stock ABC now @98, and you're short the 98 call option which you sold for 0.5. the option could have a value of (1.20 1.50), if you had a market conditional order to buy back the 98call if ABC reaches 98, you end up buying at 1.50. If you could have a limit order set at the mid of the bid and ask if ABC reaches 98, you could buy back at 1.35, saving 0.15 be nice to have risk graphs for the options and theoretical value of an option should the underlying move some up or down
TOS have that already. you want to save loads of money? well change broker. it don't matter how IB big mouth about cheap commissions; they aren't when it comes to index options, combos (spreads with more >1 leg). Infact more expensive AND worse still, when it comes to wide spread options, you pay BIG. Last week traded XEO. spread was (45.3 47.2) , buy at market or mid? nevermind about "saving" on commissions (actually more expensive on IB), you pay many times just on the bid ask spread. go figure, night!
checked commissions on both brokers. IB is simply cheaper, gp on the homepages and check it. a lot cheaper !
IB is cheaper, but IB sucks big time. in many ways IB sucks. No.1 the tws is too much. too flexible.make you distracted! No.2 IB is arrogant. they dumped my positions without asking me, I bought full account stuff with couple hundreads for the inactivity fee, and I stopped day trading, they warned me about margin violation, they ask me to keep 2% of cash. bastards! on order to charge the inactvity fee, they dumped my very profitable position to maintain 2% cash margin requirement! No.3 IB keeps you to day trading! that sucks big time. No.4 IB discrimnate small retail traders! when I get hot, they give me special support line! I never know that, longtime ago I dial the number in the web site and waited waited for reply, with that line, when you call,you get answered immeadiately, they waitfor you!
just like buy shoes, whatever suit you is the best. in trading, commission is important. but not the critical. the critical is whether you have the right trading idea! to me, look at quote too much is harmful. bought ES at 1600, hold through the big drop, now it is at 1670+. refuse to see those noises will produce better results! brokers is not the key toward success. commission is not either!
Right now I use Excel to calculate the mid and "fair" sell and buy prices based on the current bid/ask. Then I manually enter that calculated price for a limit order. It's a manual error-prone process. I like OP's suggestion mostly because it sounds like this could be automated in the TWS platform itself. TOS does do something like this where you can dial in a limit order between the bid/ask.
wrong! for index options ib are significantly more expensive, TOS gives special commission rates for ib users. $1.2 flat per leg for me, trade an index option on ib and youre paying about 1.5 a leg. for equities legs can be 1.55 a leg, as they have hidden fees like exchange fees,cancel, modifications, inactivity fees. wtf! TOS has all the features you could desire for option traders incl the one the very important one the op suggested.
TOS: https://www.thinkorswim.com/tos/myAccounts/displayRates.tos# Internet $9.99 + $0.75 per contract IB: http://individuals.interactivebrokers.com/en/index.php?f=commission&p=options1 United States - Smart Routed: <=10,000 Monthly Contracts Example1 Contract @ USD 2 Premium = USD 1.00 2 Contracts @ USD 5 Premium = USD 1.40 3 Contracts @ USD 0.075 Premium = USD 1.50 5 Contracts @ USD 0.03 Premium = USD 1.25
commission fee is not significant orcritical. IB sucks! arrogant firm! only thing you need pay attention is who makes money! IB almost the bigest one now, so they make lots of money from you! suckers hug their true sucker! less trading, more profit is the key