Re: Best online Options Brokers for Aussie?
Normally i waste time by putting my order just inside the spread like 1 point and slowly moving it till its gets filled, then i do the same again on the other leg so it all adds up in lost time, not good when the underlying is moving quick.
This is a pointless yeah, should i just be placing the orders right in the middle or should i just meet the prices and be done with it? (except for when the spreads are excessively wide of course)
Yes, it can take up a lot of time trying to work both orders - would be another advantage of trading the combo.
When I first traded options, it was necessary to leg in and used WebIress for trading. I used to have both market depth windows displayed and then would work one side of the spread - usually going to the mid point fairly quickly to see if there were any takers. Sometimes you can be lucky and another retail trader will take your price. Sometimes it's worth watching the two market depth windows for a while to see if there are any retail orders that come in close to the mid price and at least get one side of the order filled there.
One would imagine that if the MM sees you slowly ticking down, they are going to leave you as long as possible - unless there are a few different MM firms giving a bit of competition. All guesswork as I have never seen how the MMs work on their side of things.
I still do leg in at times. If I see a retail order bidding or offering at a better price than I can get from the MM, I will go for it
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To work out a combo price, I usually take the mid price of both and subtract that - then hopefully you can get the order taken with only a small amount of slippage from that mid point. Usually far less slippage than just trading the relevant bid and ask. To save getting the calculator out each time, you can fairly quickly find the average of the difference between the two bid prices and the two ask prices.
Eg. call vertical.
Option 1 bid/ask = 30/36
Option 2 bid/ask = 15/18
Spread bid = 15 / spread ask = 18
Average mid point for spread = 16.5
Works out the same as the conventional way, but a quick way when visually scanning an option chain.
Might not suit everyone - just something I've found useful.
If phoning the order through, it's a nuisance to keep calling the broker every time you want to amend the order. With TD, once they have the order set up, they give me the code for that particular combo (only good for the day) and then I am able to amend, delete, re-order as I would any single option order. I really like that bit. Sometimes you can see other orders, and sometimes the MM brings a counter bid or offer which is very helpful. Perhaps you could try a phone order with Commsec and you should be able find the spread code in your order under "Security" in your Order Status window. But ask first as they may not show the spread order through your Iress - and you would have to weigh up the cost of higher phone order fees vs. what you could save on the spread.
I don't think you can see the market depth window for spreads with IB so you wouldn't know if a MM put in a counter bid/ask, however, you can amend, etc quite easily.
Longer post than I thought
- hope it helps