It is very difficult to enter spread orders using DMA in TWS rather than smart because you have to enter each leg by choosing an exchange like the CBOE. With each leg they ask if you' re sure. You're entering a spread order into the COB at the exchange. There is no legging risk if you enter that way, but they charge extra for these orders because they lose control of the order for internalization. BTW, to do this you have to change your option monitor from smart to ISE or CBOE so you can see the exchange's markets rather than the NBBO. They really don't want you to do this. Like I said, TWS is not great for spreads. Very good for stock trading or individual option orders if you don't mind your order entering an internal option dark pool before going to the exchange.
That means you could have sent your order to any COB they have access to rather than just the CBOE. Again, when these issues occur call support right away and ask why you are not receiving an execution. Don't email ask for the trading desk. You just won't like their response.
Failing to get a response within a day, I called. Yes, I did not like their response. First, they try to shove off by assuming that you are somehow incorrectly combining individual leg bid/asks (I say incorrectly, because a correct combination of individual bid/asks should give you the bid/ask for the spread itself, since IB can and does route individual legs to get a spread execution; their site says so). Then they express surprise that I can display the spread itself on the TWS portfolio page and chart the spread itself. Then they say that even if the bid went below my bid it doesn't mean I get execution (duh, really?). After being retold that both bid and ask went below my bid, they switch to the claim that the chart must be showing some imaginary , not executable bid/ask, without explanation as to why IB would display them as legitimate spread bid/asks. Somewhere along the conversation they try to steer me to the fact that the closing mark price was above my bid, and that's the only thing they can see. Then they claim that they can see less data than my measly retail TWS, and that they can't tell. Then comes the actual trades that happened below my bid. It's back to the claim that those trades may be imaginary non-executable single leg trades that somehow get combined to be reported as spread trades. Well, maybe. But then they should fix their reporting so that they won't show spread trades that they can't execute themselves, and don't consider it as legitimate spread trades. Thinkorswim also shows the same trades as spread trades, for what it's worth. Oh, and yes, one of the later responses (after they figure that the more trivial explanations meant for less informed customers weren't working) was indeed to submit it directly to the exchanges rather than smart routing. Sort of saying "well it's your fault that you trust us to begin with". Indeed. I am supposedly going to get a more complete "explanation" this week, but my impression is that if they can't skin you alive by their own trading arm while executing a spread trade, they won't execute it at all. Better yet, they will probably front run the order and get the fat while keeping your order on their server feigning judgement that it's not "marketable". I am sure it's all legal, and that's the only thing that counts. Anyway, I'll start avoiding SMART routing and see how it goes. Maybe it all makes sense, and my negative impression is wrong, but I am getting fed up with IB failing me in bread-and-butter issues that I shouldn't have to worry about (I am not scalping or trying to be a market maker, or trying to game the system in any way; I am just demanding what the market is offering at a given time). Maybe it's just a matter of a mismatch between the kind of trading I want to do and the kind of broker they want to be. But I don't know which broker would be better; that's my issue at this point. Would it make a difference if I switch to "professional" (huh!) status and pay higher fees? Neutral P.S. Thanks so much for your enlightening explanations 1245!
I knew this would happen because I had a similar issue and response. In fact they gave me information I know to be incorrect. I entered a spread around 10am. It was executed later in the day and I was charged for taking liquidity. It took two phone calls to get them to tell me that my order was in their system, then executed when marketable ( probably with Timber hill on the other side getting paid for adding liquidity on my order). I closed my account. TWS is not good for option spread traders. It's slow and frustrating. Good luck, 1245
By the way, I wish to be fair to IB and say that it is quite possible that the data displayed on their spread charts is faulty, rather than anything more sinister. The sinister part is possibly their lack of interest in fixing such issues. Although I still suspect that the spreads did get to executable condition (via SMART, not COB) for short periods, they had no incentive to do it without an extra profit motive. In any case, they seem at best lukewarm toward their customers, and maybe one cannot expect more than that. Earlier this year, they made a colossal mistake in handling a trivial, ordinary reverse split that paralyzed my account at the worst possible time, and I had to beg and plea for days until they came up with a duct-tape solution (after which I still had no idea about my true NAV during the day for weeks) so that I could actually trade and hedge without liquidation. I sure had boneheaded positions at the time, but instead of focusing my energy on learning and figuring out how to deal with my own mistakes, I had to worry about the very existence of my account. It was a nightmare. That is not what you expect from a first-rate broker. But on this spread issue I am still willing to give them the benefit of the doubt until proven otherwise.