Options Fills on Bid/Ask Spreads

Discussion in 'Options' started by EliteTraderNYC, Feb 29, 2012.

  1. The answer to the OP's question lies in the individual underlying stock. If you have more than a penny or two wide spread, then there are likely to be CBOE ELECTRONIC DESIGNATED MARKET MAKER ("E-DPM") (see www.cboe.com for more info). These MM's can use flash orders to stop orders from being re-routed, and often do. They use the "save customer money on re-routing fees" argument to do so.

    I suggest you try using mid point pricing as a start for the symbols you are trading. Remember to do nothing without understanding the conversion/reverse conversion math. Don't worry so much about all the detail greeks, just know your delta's, gamma's, beta's and theta's to begin with.....and understand conversion pricing. Yes, I said that twice, because without this knowledge you're in big trouble trying to judge valuations.

    Keep it simple, option trading really is.

    All the best,

    Don
     
    #11     Mar 1, 2012
  2. Hey Don, thanks for the response. What I've noticed is that I did get executed in between bid/ask on spreads but not on the flys. I wonder if a market maker has to handle flys differently than the spreads?
     
    #12     Mar 2, 2012
  3. Hey guys, here's an update on my options trades with relatively wide bid/asks:

    33% got a fill at the midpoint of the bid/ask, betwe. secs to hours
    33% had to move closer to the ask, slightly below it
    33% no fill or the trade moved away from me
     
    #13     Mar 5, 2012
  4. rmorse

    rmorse Sponsor

    Which exchange are you routing to?
    Are your orders single orders or spreads?
     
    #14     Mar 5, 2012
  5. Hey Robert, I just checked, I trade through Optionshouse.com and the exchanges were a variety, such as...

    phlx
    cboe
    amex
    ise
     
    #15     Mar 5, 2012
  6. Also be aware that depending on your broker and where you are routing, you may get dinged with a cancel/modify fee. Some are pretty minimal (BATS), others can be fairly hefty (NASDAQ).

    Just something to keep in mind if you are going to work your fills with a bunch of modified orders.
     
    #16     Mar 5, 2012
  7. I have not had my short orders filled for 4 days so far.

    Don't worry about it. Eventually your order will get filled.:D :D I am working the LEAPS though. (3 different strikes)

    I stick them a little higher than midpoint myself the last few days. Although after a while everyone ends up matching my quote on the ask side.
     
    #17     Mar 5, 2012
  8. I am in the same boat. look at the order book for the 2014 december 130 put LEAPS contract expiring on December 20,2014.

    I am the one lot order sitting on NYSE on the ASK for 22.22, I am the top of book.

    The Bid is 20.83 and Ask 20.22 (my order) A measly 39 cents difference, yet for hours no one wants to fill my order.

    Whats 39 bucks to some Wallstreet guy? Why not give the small guy a chance.
     
    #18     Mar 6, 2012
  9. I finally got filled @ 22.22 . It took a few hours though.
     
    #19     Mar 6, 2012
  10. I noticed now that the bid is narrower on the DEC 20, 2014 130 put

    to bid 22.09 ask 22.35

    I am the last print at 22.22 :)

    Why is the bid/ask now narrower than earlier?
     
    #20     Mar 6, 2012