Pair trade take profit in TWS

Discussion in 'Order Execution' started by arman555, May 17, 2019.

  1. minmike

    minmike

    The last traded prices on the legs is what is changing. The bid ask in the spread market is meaninless in your pl calculations.
     
    #11     May 18, 2019
  2. arman555

    arman555

    thank you for the reply, the rep said something similar but i didn't quite catch it. Its actually a good news if Bid and Ask is meaningless, but if i close the position fast enough at the point (i will get that PNL, right? (How to close position on Pnl is still a mystery.)
     
    #12     May 18, 2019
  3. minmike

    minmike

    You can't. A spread market is synthetic. Only the legs matter. What is probably happening is the quote from the less liquid market last trade is stale. Meaning the last trade could be at 10, but the quotes in the leg market are 12 at 14. But since it hasn't traded again, pl is still calculated from laat traded price. Pull up a ladder for each leg and you will understand better.
     
    #13     May 19, 2019
  4. arman555

    arman555

    Okay, i will do that. But what difference does it make if the qoute is old for as long as its calculated right. Ex: Sell calculated from Ask to close and buy order calculated from Bid to close.
    Also shouldnt the Bid and Ask change of the combo even if the ONE of legs price change?
     
    #14     May 19, 2019
  5. minmike

    minmike

    In less liquid contracts the last traded price on a leg might be outside the bid ask. PL is calculated by last traded price in outright market not spread market.

    Calculate right doesn't imply that the price is currently tradable.
     
    #15     May 19, 2019
  6. arman555

    arman555

    So I can see the profit but cant take it? I mean if the last price is where the profit is calcuted from then shouldnt I try to take the profit ON THE LAST PRICE? When that last was the "Current" price?
    also i see that right now last is actually the Ask price of that order...
     
    #16     May 19, 2019
  7. minmike

    minmike

    Either you are being intentionally obstinate or you don't understand what you are trading.

    If you buy a contract on the bid. There are 1000 offered on the ask and a 1 lot trades on the ask. Your pl will show the price as the last traded price the ask. But you would have to wait in line until getting a fill on the ask if you ever do. Best of luck this should be clear by now.
     
    #17     May 19, 2019
  8. arman555

    arman555

    I understand the concept of liquidity... thats not even my question. But thanks anyways
     
    #18     May 19, 2019