SpreadTrader for futures on TWS

Discussion in 'Order Execution' started by TraDaToR, Jul 19, 2007.

  1. TraDaToR



    I am about to move from TradeStation to IB and I have a few questions about spread trades on "SpreadTrader for futures". If someone is using it, I would be glad to get these informations:

    - I have tested some calendar spread strategies based on calendar limit orders. Can you place a limit spread orders of a typical value through "spread trader for futures"( not clicking the actual bid/ask spread value like on the tutorial )? When I am placing my spread limit orders through IB, are they entered "as is"in globex( for example ), all day readjusted to both legs and getting into Globex FIFO algorythms, competing with outright limit orders?That's really important to me.

    -I also saw that spread traders for futures automatically create "sell the nearby month- buy the further" spreads. I assume it's the default setting and you can as well enter spread limit for "buy the nearby and selling the further. Am I right? Sorry about this question, it is just to be sure.

    Thanks a lot.
  2. gkishot


    I am not sure about your point of 'not clicking the actual bid/ask spread value ' since after you clicked on bid/ask you can edit-in-place you spread value before transmitting it to exchange. After you transmitted you order the exchange matches up the both legs for the required spread price.
  3. TraDaToR


    Thanks a lot , Gkishot.

    It's not a problem how you set the spread as soon as i can define a limit spread of whatever value, transmit it to exchange in the morning and let it run for as long as it's not cancelled or filled.

    Can you both go long or short the spread through SpreadTrader?I get confused by this sentence on IB website :"Calendar Spreads always constructed to sell nearby month and buy the distant month. "

  4. yeah i think that's the best solution as far as im concerned
  5. but then again, im also a newbie!
  6. gkishot


    No, you cannot go both long and short the spread as you cannot have both long and short the same contract. I am more accustomed to clicking on the ask/bid prices to create the long/short spreads. Buying spread is equivalent in IB to being short forward month and long backward month. I click on the ask price of the spread and then set through edit-in-place the limit price and the quantity.
    Selling spread is the same in IB as being long forward month and short backward month. Clicking on the bid price of the spread will create the short spread. After you are done with setting the values of the spread all that's left is to transmit your order to the exchange.
  7. TraDaToR


    Thanks a lot. Yes, I know you can't go long and short the spread at the same time. I was asking if it was simply possible to short the spread through the software and if there was not a limitation to short limit a spread for whatever reason, IB or regulations.The sentence on the website was just intriguing.

    Thanks again.
  8. The answer is that IB lets you do the things you want to do. IB does let you send a single order to GLOBEX, which encompasses both legs of the same spread at the same time, executes at one price for the entire spread, and can rest as a limit order on GLOBEX, competing with other similar orders on GLOBEX, until somebody takes the other side of the spread order giving you an execution.

    IB also lets you go long a spread, or short a spread, just as you wish.

    The person who said you cannot do this misunderstood you. He thought you wanted to go both long and short at the same time. I'm sure this isn't what you meant.
  9. TraDaToR


    Hello Jim, thanks.

    I have a question: does the counterpart of a spread trade is always a spread trade or is it possible that when you're getting filled on a limit spread, the counterpart are two independant ( successive )outright trades?
  10. gkishot


    The filling of the spread trades is done directly on exchange and it would be logical to me to assume that they do that with outright trades based on their price and quantity.
    One of the reasons that makes me think so is the fact that IB keeps spread after it was filled as 2 outright individual trades.
    #10     Jul 20, 2007