Hello I have been with Charles Schwab now for some time, which I use to trade options. I mostly trade butterfly and vertical spreads. I aim to be filled at the mid price for almost all of my trades. However, aside from perhaps 3 occasions, I never seem to get filled at mid price with this brokerage. I entered multiple orders every day, and each time the price simply trades straight though my limit, without ever being filled. I only ever use limit orders, never market. What I would like to know is, does the broker block these trades from going though, or are market makers being difficult here? Because it is very frustrating to have to pay more to enter a trade and if changing broker is necessary I shall do so. Thank you for any insight
What are you trading...make sure it's something very liquid. What about size? How fucked do you get if you use market orders....if it's only a tiny bit, consider market instead of limit orders And ask your broker directly about this inquiry first I'm sure there are valid reasons why other than the world is out to get you
Hi - As an X-Market Maker I can provide insight. For most option spread orders, the other side of your trade will be a MM. Their automated systems look for an edge to their values. If there are no customer orders on any of the legs on any of the option exchanges moving the midpoint, it is a good assumption the midpoint is what their system considers “fair value”, which can change with market conditions. Since the point is to buy below that and sell above that, not trading with you at the midpoint is not them being "difficult". It is a for-profit business. Fair value profits them offers no profit incentive. In addition, when limit orders placed on the option exchanges change the Mid-point of the NBBO of a spread, that might provide a less profitable entry point for them. When it comes to your broker, if they are sending the order to any exchange COB, vs holding it with Designated Market Maker (DMM), it might not matter which broker you use. So, the question for them is, where do your orders go after you hit send?
Thank you for the insight Robert. For example, often times I may place a debit butterfly trade for as low as 0.01(1 dollar risk per contract) and once or twice I have actually been filled for that price, based upon the mid price. I do try to enter trades as cheaply as possible using as little risk as possible. However, every day for several months now the majority of my orders simply go unfilled. I have even adjusted the price all the way up, still no fills. I understand many brokers use the same logic, some sell order flow etc. I have tried a few brokers now at this point, my next stop may be Tradestation.
The majority of the time you're filled at mid is bc the market moved against you. Look at the OP's post history... idiot thinks that people want to short calendars and flies at a penny.
Takes an idiot to know an idiot I suppose. Did your mother consume alcohol during your conception? Retard