ISE not reflecting bids on combo orders

Discussion in 'Order Execution' started by huh, Apr 24, 2008.

  1. huh


    It looks like in my TWS, bids are not being reflected on combo option orders. For example A spy May 142/144 vertical spread is showing a bid/ask of .30/.40 and I enter an order for .35 my bid never gets displayed.

    I talked to support at IB and they said this is an issue with ISE. Anybody have this problem before and do you know how long it takes for this to get should I just not bother trading for the rest of the day and hope its fixed tomorrow or is this something that typically gets fixed on the same day. Its been like this since the market opened this morning and its still happening.... :mad:
  2. It is still there and will be filled if necessary bud.
  3. It is possible that your order is being held by IB and monitored. Look at the destination. If the route is SMART then it is not being shown in the ISE book. If the destination is ISE then it is working at the ISE.
  4. huh


    The destination is SMART but the problem is that its showing the standard wide bid/asks that are like 40 to 50 cents wide. I like to watch those spreads shrink down to 5 to 10 cents before doing a trade to get an idea of if there is a change of direction coming before doing an order. So this wide b/a spreads being quoted are totally useless to me and for my trading strategies.

    I did have an order of mine get filled so it looks like orders are going through but not being able to see the spread shrink sucks for me. So I guess I'm sitting out till this is resolved......would have been a darn good trading day today too!
  5. You do realize that IB is quoting the natural bid ask ; I. e. if you were to lift the 142 and hit the 144 don't you? The general public can't see the complex order book for the most part, but the CBOE lets you see the best bid/ask on complex orders. See link below.

    And no, its not IB's fault.
  6. huh


    Yeah the natural b/a prices are horrible. I admit I don't totally understand how the order routing is handled. You mentioned the complex order book, so my understanding from that is in my example here the 142/144 vert combo showed a b/a of .35/.45 which is just the natural bid/ask (just subtracting the bid of 144 from the ask of 142 to determine the combos ask price). Typically if I come in and place an order to buy the 142/144 spread for .40 then the b/a switches to .40/.45 but today it was still just showing .35/.45 even though my order had been submitted.

    So from your post I'm assuming that means IB wasn't getting the complex order book prices from CBOE? If I'm understanding that correctly then that would make sense and its not IBs fault. Hopefully, then this complex order book issue will be fixed soon since I only trade the complex orders and try to avoid paying the "natural" b/a.
  7. Your missing the point. You won't see the bid/ask on the spread improve when you submit your order. The possibilities for different spread orders are virtually limitless. The exchanges already bitch about bandwidth using pennies. How do you think they would handle thousands of more quotes for just one underlying. I.e. they would have to quote the 100/150 vert on SPY, the 101/150 vert, the 102/150, and so on. And then the same for the 151 and up. And thats just the verticals! As far as I know, only MMs can see the spread orders fully. Your bid won't improve the bid/ask on the vertical as you see it. Every brokerage is like this.
  8. huh


    Well for instance today I'm looking at the 780/790 RUT May call vertical with a b/a of .19/.25, if I enter an order to buy for .22 then the b/a will shrink to .22/.25. This wasn't happening yesterday, thats what my complaint was.
  9. If thats the case, then I stand corrected. Can someone else shed some light on this?
  10. cdowis


    Bottom line:

    The spread is a combination of the b/a of the individual components -- the spread b/a does not exist on the floor, only as it is *computed* on the IB computers.

    If you want to change the b/a of a spread, you must change the b/a of the individual options. Entering a spread order does not really change price discovery.
    #10     May 13, 2008