Interactive Brokers won't let me do this. Anyone know why? Is it illegal? What if I open one side with IB and another side with another broker, split-screen. Is this a problem? Isn't this what market-making is?
It is against option exchange rules for a priority customer to be on both sides to open. A professional customer is allowed to but IB needs to have the ability to change Compliance settings.in addition, you have to tag your orders correctly. If you enter buy 10 to open and sell 10 to open, then buy 5, 5 of the 10 on the sell side are incorrectly tagged.
Are you asking if you can have both a bid and ask outstanding on the same stock? As long as you have not lock-crossed the stock (i.e. where the bid price equals or exceeds the ask price), you certainly can, and IB does allow it.
Bob, in your opinion could a non pro customer be on both sides of an option market if the orders are routed to different exchanges? And, Would it matter if these exchanges did not give customer priority.
That is a good question that I’m not comfortable providing my opinion on in a public forum. The reality is that a MM is a regulated trader that has quoting and other requirements that customers do not have. Customer orders have priority to firm and BD orders. The exchanges do not want to provide both priority and two sided trading while not regulated.
IB allows you to trade both sides of a market, but you have to wait for a period to do it. That period varies depending on the symbol. Essentially you first have to match one side and then send an order for the other, after that period has passed. https://ibkrcampus.com/glossary-terms/wash-sales/
These are not wash sales we are talking about. We are talking about market making as a customer where both sides are to open.
no and it would be dumb to run a strategy like this. you post a bid and an offer. Get picked off on one. Now what do you do? You are in a position you don’t want and paid the new bid offer.