Hello, Im a new private optiontrader. I am considering using only Amex, ISE and CBOE for my qqq option trades. After researching ISE rules i found that ISE Rule 717(c)(1) says: "Electronic Access Members are prohibited from entering into the System, as principal or agent, multiple option orders for a single trading interest if one or more orders is for fewer than ten (10) contracts." Does Amex and CBOE also restrict entering multiple option orders for less than 10 options contracts for a single trading interest? Which exchange is the best for entering multiple small option orders? Thanks for any responce,
Essentially if you are going to trade a 1 lot and only a 1 lot then you do not have to worry about the rule. The ISE has the rule because they do not want you to break up a 10 lot into 10 1 lot orders. This is because if you enter an order of less than 10 contracts, the order will be quoted with a size of 10 (i.e., the market makers are going to have to honor the remaining excess volume).
Thank you Freehouse. Unbundeling small positions with Ise seems to be a very time consuming trading practise. Because if I want to sell 9 call options qqq 2004 strike 30 each at a different price, I cannot enter more then 1 order to sell 1 contract at the time and I will have to wait for that order to be filed before entering a new order to sell the next contract. I still wonder if for instance Amex allows the entrance of 9 seperate orders at a different price at once without any restrictions?
WOW, i totaly didnt even think about this rule, hmmmm, i like to scale in and out of the options on the qqq's pair out either in 1 or two contracts. So what exactly is prohibited? what would happen to me if i break the rule? Is scaling in and out of a particular position basically illegal? thnx guys.
Yep, ISE doesnt like unbundeling positions in multiple orders of less then 10 contrakts per order. Amex doesnt have this restriction!!!!! Read Amex mail I recieved today: The American Stock Exchange does not have a rule which prohibits orders for under a certain size. For more information please go to http://www.amextrader.com and click on "Constitution And Rules". Look in the section "Trading Of Options" and then "Conduct of Accounts In Options Trading." Regards, XXXXXX XXXXXXXX Options The American Stock Exchange 212-306-1882
so basically i need to route all my trades like this to amex only??? so no more of ib's best routing or smart or wahtever its called? what are the implications of this, if i trade like this, is there a fine, or prohibition of trading in options? Well this throws a curveball into my trading. damn..>>>>>:eek:
Ib compliance warned me that entering multiple small orders at once at ISE would harm or end my trading priveleges. I told them that I will be using Amex for this strategy. No responce from ib on my choice for AMEX yet.