Iron Condor fills?

Hello,

I have been trying all week to get a series of Iron condors filled.

The broker is thinkorswim, the iron condors
were limit orders on the OEX, SOX, SPY, QQQQ.

None of them were filled. I wasn't trying to get a better price by raising the limit.

Are there any tricks to getting this type of spread filled?

Should I leg into each credit spread?
Or place each option trade separately?

I am a papermoney trading guru, but sadly it doesn't count for much....

 

I think the paper trading platform will only fill at the bid and asks so you cannot practice splitting the wide spreads on some of the indexes.

My advice is stick with the b/a on the paper platform to get the fills and experience and if you can do well there, then you should see better performance live when you can actually shave off of the b/a spread.

 

Hello optioncoach,

My previous post may have been a bit misleading.
I'm doing fine with the paper trading platform, but I'm not getting filled on the live platform.

Are there any techniques or tricks to getting filled on the live platform?
Each of the IC strikes have a delta of around 20/-20.

I wasn't trying to shave anything off the live, as I just wanted to get filled.

Thanks.....

 

I dont know what size trades you are talking about, but if you want rediculously good fills on low vol risk trades (such as condors) you can send the orders to the pit. I trade through the SPY pit at the CBOE and I get amazing fills. The DPM and locals in that pit will make .02 cent wide markets on all low risk vol trades. I think the commissions might be a bit high to call up a floor broker. I pay about .20 a contract so that takes out .002 for each leg of a spread.

Good Luck.

Scrappy.

 

Thanks Scrappy for that info.

I was reading one of optioncoach's posts on his SPX Credit Spread Trader thread.

optioncoach:
"Try and get a $0.75 fill on a 5-point bear call spread on the SPX... will never happen.
I use the 15-point spread to be able to get the bigger credit.
I usually choose long strikes 15 to 20 points apart as my goal. That is because with those spreads I can do a large number of contracts to get my high volume."

The width between my buy/sells are only 5 points apart. Eg Sell 1305 PUT, Buy 1300 PUT.
Maybe this is why I'm not getting filled.

Could someone please explain why a market maker does not like to fill a 5 point spread, but will fill a 15-20 point spread?
I'm guessing its something to do with risk.

Thanks......

 

I sell condors on TOS and i notice it can be pretty tough to get filled. If you move your price a little closer to nat on the mid/nat slider you will have a better chance, of course it will cost you a little more. way less of a prob on spy/qqq due to awesome liquidity. I go through the same thing on oex/xeo/spx. You just have to be patient and wait for the trade to come to you. it can be frustrating.

 

If the strikes are close to eachother you will get smaller bid/ask spread. A 1340-145 1400-1405 condor for example has very little risk and will be quoted as tight as you need it in the SPY pit. I am a market maker and my bid ask spread would be at most 3 cents. I do not trade options through a discount broker, but I would suspect that they route the orders to an electronic order book. The order will rest there until a market maker takes a look at it. Market makers algorothyms might not trade it but the traders in the pit would. Splitting up the orders and trading them seperately won't do anything in my opinion except forcing you to take a delta leg.

GL

Scrappy

 

Scrappy,

Thanks for the info. When paper asks for a quote, do they usually request a market (bid and ask) for a specific size, or does the pit only quote one side at a time?

Also, what is the liquidity like at a 3 cent spread in a 5 or 10 point verticle?

GL

 

I dont remember the context of my quote anymore but I just found it easier from experience to shave the slightly wider spreads.

With SPX to sell your best place to start was to go halfway between mid and the bid to sell and perhaps shave an extra dime or to and try. The orders have to sit for hours sometimes to fill so I would put them on and leave them there and wait to see if I got filled.

I do more spreads on NDX where the b/a spreads are tighter (more competition) and easier fills. There are trade-offs on NDX v. SPX so you just have to choose which you like best.

 

A quote is given for both sides of the market (bid and ask). You will get a lot of size on both sides. You can expect 5000 on both sides in the SPY without any slippage for your condor. It is important to take transaction costs into account when you trade these multi-leg spreads. SPY options are expensive compared to SPX and OEX.

GL.

Scrappy