Best online options brokers for Australia?

long88 · 4 April 2009

Re: Best online Options Brokers for Aussie?

hi malcolml,

just some feedback for you here.

i am with spectrum live, as i have noted before in the beginning of the thread.

i have use them about 5 month now, not too bad, actually quite happy with it, apart from not getting used to web based (etrade) to java based program (which is real time), and closing the trade using leg in, (which costing me a lot of money + a bit of whip saw on the market, got shaken out), but now learning from it, and got better.

you need to pay $35/month for live data (aussie), and for us, at least you trade twice a month, you will get free live data.

They are actually Interactive broker (for options, as i am using their program, and can log in to web based if i want to, plus can run it on my mobile as well).

For the CFD, currency, Stock, commodities, it is using another program, but got all the tools needed (except acceleration band).

With naked put, it is all cash secured, and all accounts are on margin, so all i have is cash, and when i need to open a naked position, cash will be locked up according to the position required until i close that position.

with assignment, i just assigned on my short leg (HBC) and it is using up 80% my margin (approx 11k USD), on a 8k AUD account, lucky i got my long leg to cover me (never go naked guys), and i am short that position for about 3 days, and market kept going up.

all i have to do there is exercise my long leg (cost me $40 USD), and i lock in my max lost for the trade, got me out of that trouble, and release all of my cash again (margin is taken because i am short hbc, and market kept going against me).

so basically one sign up, got everything you need, work out your profitable trading system (be it moving average, stockastic, macd, etc), then trade.

One thing here (my 2 cents). market have been going up for about 4 weeks now, it seems to have found the bottom, couple of retest last week, and it has snapped up (cost me some $$$ on naked long put).

Trade well.

Cheers

malcolml said:
Yeah that's true, i called westpac broking once and they told me if you don't have a Westpac Cash Manager account, the only way to trade options with westpac is by phone, i called them before and they said they charge the same rate as online trading.
(accounts from all other banks and westpac saving/daily account are not accepted by westpac for options)

Fox · 9 September 2009

Re: Best online Options Brokers for Aussie?

sails said:
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.

...

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.

I would like to be able to view the market depth for spreads. As per Sails' comments, IB does not provide that info. Does anyone know how I can get the market depth info? Thanks.

sails · 9 September 2009

Re: Best online Options Brokers for Aussie?

Fox said:
I would like to be able to view the market depth for spreads. As per Sails' comments, IB does not provide that info. Does anyone know how I can get the market depth info? Thanks.

Fox, if you are wanting it for the Oz market, I've probably changed my ideas a bit and feel now that it's debatable if it's worth it. I found it was very rare to find anyone else in the MD window for a specific spread - even on BHP. Sometimes the MMs will quote the other side at an unwanted price, but sometimes it was just my order on it's lonesome. Many times, I would cancel out of the spread and then leg the order instead - often getting a better price.

It just makes you feel like a very little mouse being toyed with by a bunch of over-fed cats. I used to have some respect for the ability of MMs in general, but have no tolerance for the apparent rip-offs. Sorry - end of vent.

It is possible that any broker using WebIress would have the same ability to give the customer the relevant ASX code for that unique spread for the current day so that it can be viewed in MD. Perhaps the other brokers could do it too using their MD windows, but choose not to - who knows in the Oz market.

Fox · 9 September 2009

Re: Best online Options Brokers for Aussie?

sails said:
Many times, I would cancel out of the spread and then leg the order instead - often getting a better price.

Wow! Legging a 4 leg spread can be a challenge with prices bouncing about! I admire how you guys manage it.

I have just been yielding to the MMs by giving them above what I think is mid-price or fair value. Otherwise, I never get a fill.

So it looks like IRESS is the way to go as far as MD is concerned. That's a bummer because I'm using IB. Why is options trading so hard? But I still keep coming back for more.

Thanks, Sails.

sails · 9 September 2009

Re: Best online Options Brokers for Aussie?

Fox said:
Wow! Legging a 4 leg spread can be a challenge with prices bouncing about! I admire how you guys manage it.

Fox, I was referring more to 2 legs - often adjustments. 3+ legs I would hang in there - obviously a lot more to lose in slippage.

So it looks like IRESS is the way to go as far as MD is concerned. That's a bummer because I'm using IB. Why is options trading so hard? But I still keep coming back for more.

I found it was useful to have Iress in addition to IB. I felt I would lose less in slippage with access the full market depth on each individual option (not just the spread). It's easier to see what's really going on. The "detail" button on the Iress MD window is very handy and I found it useful in sorting out approximate fair prices for my spreads. Whether or not you can get anywhere near that fair price is quite another story!

Fox · 10 September 2009

Re: Best online Options Brokers for Aussie?

Hi Sails,

sails said:
I found it was useful to have Iress in addition to IB.

The only IRESS I know of is the one provided by CommSec. If I recall correctly, you will need to place about 8 trades a month in order to pay for the service. Unfortunately, my trade sizes are still too small to justify using CommSec for now.

Another question if I may. If you place a spread order (eg. a vertical) in IB, how do you view the MD of that order using IRESS? My understanding is that you will need the unique code identifying the spread order to enable you to search and view the MD. How do you get that unique code from IB? Or does IB even provide it?

Thanks,
Fox.

sails · 10 September 2009

Re: Best online Options Brokers for Aussie?

Fox said:
Hi Sails,

The only IRESS I know of is the one provided by CommSec. If I recall correctly, you will need to place about 8 trades a month in order to pay for the service. Unfortunately, my trade sizes are still too small to justify using CommSec for now.

Fox, I use Trader Dealer's Iress and you have to generate 20 contract notes during the month to get it "free" - at least that's how it used to be. If you do about 12 contract notes, you don't pay full fees, but it's still another thing eating up trading profits. TD have quite a good system where you can trade quite a bit throughout the day and, within certain criteria, only generate one contract note for the day for that particular stock, warrant or option. It gives the opportunity to scale a bit through the day without running up min. fees each time. This can be a huge saving in fees and I have to say that TD's fees are pretty good if trading some size. However, that doesn't deal with the much bigger issues of slippage and the relentless ASX fees per contract - plus software costs including the ASX data royalties.

I haven't used Commsec Iress, however, I am led to believe that Commsec have tailored it to their own requirements and not all the Iress features are available.

Another question if I may. If you place a spread order (eg. a vertical) in IB, how do you view the MD of that order using IRESS? My understanding is that you will need the unique code identifying the spread order to enable you to search and view the MD. How do you get that unique code from IB? Or does IB even provide it?

Any single order you place with IB should show up in the Iress MD. If you are trading a multi-legged spread, each individual leg of that spread sometimes shows up in it's relevent MD window. Sometimes you might only see one of the legs show up in MD. I queried this once with a broker and was told that sometimes the MM puts one side into the open market and sits on the other side/s of the spread. Obviously the one in the open market is the worst possible price - maybe in the hope we will keep moving the price to get that one leg closer to the action and then the MM can make more from the other side. Who knows what they do, but it's obviously how to get the most cream for themselves.

I had one order some time ago (with TD) where not one of the legs of the spread were visible in their individual MD windows. I queried this and was told the MM had decided not to show the order. So, it appears my spread was entirely at the mercy of one MM - and that was on BHP where there are supposedly multiple MMs and more retail liquidity that most other Oz options. This was pretty much the final frustration for me, leading me to quit any serious option trading in the Oz market.

That was one order I promptly cancelled and then legged at a much better price. It was a closing order on expiry day where the spread was in profit and I wanted to lock that profit in - so it was a deal that had to be done. Because I had Iress and all MD windows open for each option in that spread, I could see the activity and clearly showed there was plenty of liquidity to leg the deal - was all executed in seconds!

Fox · 10 September 2009

Re: Best online Options Brokers for Aussie?

Hi Sails,

Thanks for putting so much effort in your reply. Your fingers must have had enough exercise for today .

sails said:
TD have quite a good system where you can trade quite a bit throughout the day and, within certain criteria, only generate one contract note for the day for that particular stock, warrant or option. It gives the opportunity to scale a bit through the day without running up min. fees each time. This can be a huge saving in fees and I have to say that TD's fees are pretty good if trading some size.

I will need to check TD out. Never heard of them before. Sounds promising.

sails said:
Any single order you place with IB should show up in the Iress MD. If you are trading a multi-legged spread, each individual leg of that spread sometimes shows up in it's relevent MD window.

I think I must have misunderstood the nature of the MD of a spread order. I had the impression that the spread order itself (and not the individual legs) was placed in queue and the MD showed the spread orders in the queue. For example, if I placed a buy order for a bull call spread for $1 and you placed a buy order for the same bull call spread for $0.90, then your bull call order will be placed ahead of mine in the MD screen. The MD will consists of a queue of bull call spreads.

The queue would look something like this:

Code:

ASX Code: BC001 
   
           bid    ask 
Sails --> 0.95   1.50 <-- Fat cat MM
Fox   --> 1.00   1.60 <-- Fat cat MM's desert[/FONT]

I did not realise that you were talking about MD of the individual legs.

sails said:
Because I had Iress and all MD windows open for each option in that spread, I could see the activity and clearly showed there was plenty of liquidity to leg the deal - was all executed in seconds!

Ah! That's how you do it in so quickly.

sails · 10 September 2009

Re: Best online Options Brokers for Aussie?

Fox said:
Hi Sails,

Thanks for putting so much effort in your reply. Your fingers must have had enough exercise for today .

No worries - babysitting a couple of sick grandkids here today - so it's nice to escape when I can - lol. So, the posts are being typed in bits and pieces - hope they're not to disjointed!

I will need to check TD out. Never heard of them before. Sounds promising.

One of the things I really liked is that one of the brokers usually answer the phone very quickly - have never been put on hold or select from a menu, etc.

However, I believe they don't allow credit spreads which Grinder found out. I like butterflies, calendars, etc (all of which can be easily morphed!) and also trade the occasional debit spread close to expiry if the conditions look good - so I didn't have that problem with them. Even though the butterfly has an embedded credit spread in it, they must have been OK with that because the position itself was placed as a debit. Not unless they give some leniency for long term customers.

Code:
I think I must have misunderstood the nature of the MD of a spread order. I had the impression that the spread order itself (and not the individual legs) was placed in queue and the MD showed the spread orders in the queue. For example, if I placed a buy order for a bull call spread for $1 and you placed a buy order for the same bull call spread for $0.90, then your bull call order will be placed ahead of mine in the MD screen. The MD will consists of a queue of bull call spreads.

The queue would look something like this:

Code:

ASX Code: BC001 bid ask Sails --> 0.95 1.50 <-- Fat cat MM Fox --> [B]0.90[/B] 1.60 <-- Fat cat MM's desert [B]MM --> 0.60[/B][/FONT]

I did not realise that you were talking about MD of the individual legs.

I have altered your MD a little and put my changes in bold. In this example, the mid price of first (Fat cat MM) and the MM bidding would be 1.05 ((1.50 + 0.60)/2), so I would expect to pay a little above that if I want immediate execution - and that is usually what I do. If the market is going down, I wouldn't show my hand earlier as I have seen, time and time again, they just let your order sit there (say at 95c in your example) until that price matches their offer. I wait until I think we are close to a turning point and then go straight in with a cent or two in their favour. If I'm initiating an order and they play funny games, I simply cancel. If it's a closing order, then I will look at what else can be done - that's where understanding synthetics can help in finding another solution than just executing that trade.

But, I don't think I have explained it well enough. With Iress, I use both spread MD and individual option MD for each leg of the spread. Eg if it's a bull call spread, I would have Spread MD open plus the two individual option windows open. That way I continually monitor any activity in those two individual options to help with decisions on whether to adjust my price or, as in the example in my last post, use any flurry of activity to leg at a better price. Because it is so boring just watching your order all alone in the spread MD, I believe it is necessary to monitor the individual legs as well.

What you describe above in your spread MD example is what I would like to see, but sadly, it's was more often than not just my order sitting alone in the spread MD. LOL - it would be quite a buzz to see a MM come in on the other side with my exact size - not that I was happy with their price, but just nice to see a slight hint of action after sitting watching grass grow for far too long.

Ah! That's how you do it in so quickly.

That example I gave you was done on expiry day on BHP and the options were close to the money - meaning that's were the most activity was happening anyway. So, in that case, all legs of the spread were executed very quickly. Don't forget, I had all MD windows open, had been observing for a while, so it was pretty simple to do the deals. There were heaps of other retail orders all wanting to get their deals done, so the speed was a bit specific to the activity one can find on expiry day.

Fox · 10 September 2009

Re: Best online Options Brokers for Aussie?

Fox said:
... you will need the unique code identifying the spread order to enable you to search and view the MD. How do you get that unique code from IB? Or does IB even provide it?

Wasn't thinking laterally. I shall answer my own question for the benefit of those as dense as me . I should just create another order in IRESS with the identical spread and get the unique spread code from there. Simple! Duh!

sails said:
No worries - babysitting a couple of sick grandkids here today - so it's nice to escape when I can - lol.

Hope they get well soon. You're a fantastic grandad. When my kids get sick, I don't have the luxury of grandad's assistance.

sails said:
However, I believe they don't allow credit spreads which Grinder found out. I like butterflies, calendars, etc (all of which can be easily morphed!) and also trade the occasional debit spread close to expiry if the conditions look good - so I didn't have that problem with them. Even though the butterfly has an embedded credit spread in it, they must have been OK with that because the position itself was placed as a debit. Not unless they give some leniency for long term customers.

I had a look at TD's website. Fee wise, they are ahead of the Oz brokers I'm familiar with. The ability to put all trades in one contract note is a good compromise for both trader and broker. If IB exits the Oz scene, I will definitely sign up with TD.

sails said:
... so I would expect to pay a little above that if I want immediate execution - and that is usually what I do. If the market is going down, I wouldn't show my hand earlier as I have seen, time and time again, they just let your order sit there (say at 95c in your example) until that price matches their offer. I wait until I think we are close to a turning point and then go straight in with a cent or two in their favour. If I'm initiating an order and they play funny games, I simply cancel. If it's a closing order, then I will look at what else can be done - that's where understanding synthetics can help in finding another solution than just executing that trade.

You have taken order filling to an art form. I'm exhausted just thinking of the mind games with the MM. I feel like an innocent lamb in a slaughterhouse with my lone bid in the queue. My orders must be the butt of MM jokes during their lunch hour conversations.

mazzatelli · 10 September 2009

Re: Best online Options Brokers for Aussie?

Fox said:
Hope they get well soon. You're a fantastic grandad. When my kids get sick, I don't have the luxury of grandad's assistance.

You're the best M!!
PS: Fox It's grandmum, although I am sure she covers for grandad too :

Grinder · 10 September 2009

Re: Best online Options Brokers for Aussie?

Fox said:
You have taken order filling to an art form. I'm exhausted just thinking of the mind games with the MM. I feel like an innocent lamb in a slaughterhouse with my lone bid in the queue. My orders must be the butt of MM jokes during their lunch hour conversations.

she sure has. As if options trading is'nt challenging enough, one has to endure the head games as well.... so glad I gave Oz ops the flick, no need to worry about all that nonsense

Fox · 10 September 2009

Re: Best online Options Brokers for Aussie?

mazzatelli said:
Fox It's grandmum, although I am sure she covers for grandad too :

A thousand apologies, Sails. I've shown myself to be an MCP. Before I embarass myself any further, please correct my following gender assumptions:

Cutz - Male
Mazza - Definitely male (from your avatar preferences)
Grinder - Male
WayneL - Male (unless your videos were dubbed with a male voice)
Fox - The last time I checked, it was still male

sails · 10 September 2009

Fox said:
..You have taken order filling to an art form. I'm exhausted just thinking of the mind games with the MM. I feel like an innocent lamb in a slaughterhouse with my lone bid in the queue. My orders must be the butt of MM jokes during their lunch hour conversations.

Fox, dunno about the art form bit - necessity is the mother of invention. I'm sure the MMs have derived much amusement from my orders too. But not for long - it's fill it or it's gone... lol

mazzatelli said:
You're the best M!!
PS: Fox It's grandmum, although I am sure she covers for grandad too :

shhhh Mazza - didn't you know options are gender neutral? I can only imagine what I've started now...
Anyway, Cottle never mentioned it was a problem... lol

Grinder said:
she sure has. As if options trading is'nt challenging enough, one has to endure the head games as well.... so glad I gave Oz ops the flick, no need to worry about all that nonsense.

Yeah, the short stint I did with US options was sheer heaven. They actually want to fill your orders there. The mind games here get quite tiring when they go on for too long and I pretty much shudder at the thought of option trading here in Oz. When I get my life back again, US options it will be, but until then I am looking mostly index trades (a little of XJO options, SPI and some STW for the super fund).

Fox said:
A thousand apologies, Sails. I've shown myself to be an MCP. Before I embarass myself any further, please correct my following gender assumptions:

Cutz - Male
Mazza - Definitely male (from your avatar preferences)
Grinder - Male
WayneL - Male (unless your videos were dubbed with a male voice)
Fox - The last time I checked, it was still male

lol Fox - no apology necessary and I didn't make it clear anyway. Now you know where the long posts come from... When it comes to options, theory, experience, etc are all far more important...

mazzatelli · 10 September 2009

LOL
For the record I have nothing against female traders. The more ladies, the better I say . As you know M, I love your stuff!!!

PS: Fox, WayneL is female and that is her natural voice : *ducks for cover*

So:
Females: sails, WayneL and Fox[y Lady]
Males: cutz, Grinder, mazza

Fox · 10 September 2009

mazzatelli said:
Females: sails, WayneL and Fox[y Lady]
Males: cutz, Grinder, mazza

LOL. I think Mazza has morphed/adjusted options trading from being gender neutral to gender confused. One wonders how this thread has degenerated from "Best online options brokers for Australia?" to this .

sails · 11 September 2009

Fox said:
LOL. I think Mazza has morphed/adjusted options trading from being gender neutral to gender confused. One wonders how this thread has degenerated from "Best online options brokers for Australia?" to this .

Sorry - I think I started the morphing degeneration ...
But then life can't be all serious - gotta have some fun too...

wayneL · 11 September 2009

I'm one of those girls that likes girls.

cutz · 11 September 2009

sails said:
a little of XJO options, SPI and some STW for the super fund

Hi Sails,

Are you using SPI futures in conjunction with XJO options ?

sails · 11 September 2009

cutz said:
Hi Sails,

Are you using SPI futures in conjunction with XJO options ?

Not live trading at the moment, but looking at ideas for when I have the time to trade live again. I not sure how liquid SPI options are, so yes, XJO options are a possibility.

I have an XJO multi-legged thingy on the IB demo- started off as a butterfly and has had a few adjustments along the way and now resembling two short flies. lol - demo is worse than real life - the demo doesn't seem to execute spread trades, so they have to be legged in and will only execute if buying at the offer and selling at the bid! Still it's better than getting rusty and doesn't matter and then not risking real $ if I'm not around when the next adjustment needs to happen.

Spi futures is how I started trading with Safety In The Market about 11-12 years ago. I struggled with it back then and so been toying around with a bit of scalping to see if I can do any better at it - again on the demo due to too many interruptions to risk real $.

Best online options brokers for Australia?

long88

Fox

Whale, shark, eel, plankton

sails

Fox

Whale, shark, eel, plankton

sails

Fox

Whale, shark, eel, plankton

sails

Fox

Whale, shark, eel, plankton

sails

Fox

Whale, shark, eel, plankton

mazzatelli

Grinder

Don't feed the bear!

Fox

Whale, shark, eel, plankton

sails

mazzatelli

Fox

Whale, shark, eel, plankton

sails

wayneL

VIVA LA LIBERTAD, CARAJO!

cutz

sails

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