Interactive Brokers and Options trading in Australia

[sails]

Re: Interactive Brokers and Options trading in OZ

Thanks for checking Cutz At least you are aware where the trouble lurks - just make sure you never, ever have a minus sign preceeding a limit price when selling.

Wayne, have just taken this snapshot of the TWS page - all the displayed spreads were generated as debit spreads (though it shouldn't matter).

The top combo was a combo of the two calendar spreads generated in the generic window. Entered it carefully, filled in the fields methodically as they presented. Still it shows negative bid/ask.

The next two calendar spreads are also showing negative bid/ask. Cutz found the same thing.
Then tested it out with a vertical and, again, negative bid/ask. Cutz set up a vertical and it shows normal (positive) bid/ask.
Then, for whatever reason, I generate a butterfly and voila, it gets it right

The only pattern I can find here is that those with negative bid/ask have a sell leg entered first (idendified by the minus sign) in the description column. The butterfly has a buy leg entered first as can be seen with the initial plus sign.

Anyway, snap shot is below so you can see what I mean:

EDIT: In the snapshot I see the bid is -0.010 for the fly, however the ask is positive. It is simply that the bid price is so low and not part of the problem I have discussed. eg mid price for the fly would be approx 14c.

 

[sails]

Re: Interactive Brokers and Options trading in OZ

...Then you can just click on the spread bid or ask quote to enter your order

I would normally do that if the bid/asks were normal. Have only been bringing up the order ticket as I felt it was a safer means of checking on the order...

Looks like it's time to contact IB support - hope it is better than last time.

BTW Wayne, I see your description column has a sell leg first in the calendar and yet it retains normal bid/asks - so that might not be the problem. Methinks there might be a programming glitch..

 

[wayneL]

Re: Interactive Brokers and Options trading in OZ

BTW Wayne, I see your description column has a sell leg first in the calendar and yet it retains normal bid/asks - so that might not be the problem. Methinks there might be a programming glitch..

I would say that would have to be the problem too.

 

[cutz]

Re: Interactive Brokers and Options trading in OZ

Hi Sails,

How did you go with IB customer service?

On the topic of spreads with IB, is it an issue to close out part of a combo initiated spread once it’s in the system or does it need to be closed as a complete combo. i.e., sometimes if I put on a credit spread (I don’t use combos ATM) and the market swings wildly several days later for example, I may close off the short leg and hang on to the long leg for possible re-entry on the short side. I was wondering if I could do the same on a spread that was sold as a combo.

 

[wayneL]

Re: Interactive Brokers and Options trading in OZ

On the topic of spreads with IB, is it an issue to close out part of a combo initiated spread once it’s in the system or does it need to be closed as a complete combo. i.e., sometimes if I put on a credit spread (I don’t use combos ATM) and the market swings wildly several days later for example, I may close off the short leg and hang on to the long leg for possible re-entry on the short side. I was wondering if I could do the same on a spread that was sold as a combo.

Yes you can close out one leg at a time, it's no problem.

I often adjust trades via entering a spread trade as well.

Say I have a short straddle and want to move one of the goalpoasts sideways a bit. You can buy a vertical spread with the bought option the same strike/expiry as on of the short options in the straddle and voila, you have a short strangle.

TWS will automatically buy to close the short option in the straddle and sell to open the strike further out.

 

[sails]

Re: Interactive Brokers and Options trading in OZ

Yes Cutz, CS is happening - slowly. Heard back and have been asked to supply details of each spread so they can be re-created. Have posted below the info sent so far. Top one is the summary showing the bid/ask quotes which I sent in originally - the second is the same spreads with the legs included. Will keep you posted...

Out of curiosity, was wondering if you would mind putting these same dummy orders into your TWS to see if they consistently come up with the same problem? Only if you have time though - don't want to distract you from your trading ...

Wayne is the helpful options TWS expert here at ASF - he's been using if for a long time. Using spreads to move positions is great way to get the job done. It also helps me think about the spread I am about to apply and does it fit with my view of the market, volatility, etc.

TWS is like Iress where you don't have to specify whether you are opening or closing an option position. Eg. if you have a short position and want to close it, you simply place a buy order for that particular option. Whether it is part of a spread, it doesn't matter.

IMO, clicking on a "close position" button is a convenient way to simply reverses the original position and reduces the risk of trading a different option in error. That's my understanding so far of TWS - I'm sure Wayne will correct if I've got it wrong.

 

[cutz]

Re: Interactive Brokers and Options trading in OZ

Hi Sails,

Yep problem is still there, results as follows in same order as you have got,

Bid Ask
-1.2 -1.06
-0.71 - 0.53
-0.35 -0.235
0.16 0.48


here's the result for the Jan 30/25 put vertical spread i had yesterday entered as a sell,
0.725 0.84 it hasn't got a minus in front, this one looks normal.(Along with your butterfly)

BTW thanks for the tips Wayne & Sails.

 

[sails]

Re: Interactive Brokers and Options trading in OZ

Thanks Cutz

We'll see what reply I get next! BTW, I decided to email the Oz office as I really didn't want to try and explain this to an apparent non-techie with limited English skills and who didn't seem to understand the issues I was having with these Oz issues last time round. Thankfully, it's not a live trade this time.

 

[wayneL]

Re: Interactive Brokers and Options trading in OZ

IMO, clicking on a "close position" button is a convenient way to simply reverses the original position and reduces the risk of trading a different option in error.

YES!!!! lol

I learned that lesson too.

 

[sails]

Re: Interactive Brokers and Options trading in OZ

...Will keep you posted...

Oh well, the silence is deafening

So, who knows if they are trying to fix the problem or it's not important to them...

Only time will tell....

 

[cutz]

Re: Interactive Brokers and Options trading in OZ

Hi Guys,

I've got an iron condor over SPY on (AMEX) which I set up over several days, and just now I have set it up as a combo to put in the quote panel along with both credit spreads and I’m seeing negative prices on the iron condor, (for info Feb SPY 70/75/100/105 shows -1.06 -0.97) , the credit spread leg pricing is OK.

I’m not planning on closing this spread as one order but if I decided to, I guess would have to change the default price on the sell order to show a positive number as Sails mentioned ?

 

[sails]

Re: Interactive Brokers and Options trading in OZ

Hi Guys,

I've got an iron condor over SPY on (AMEX) which I set up over several days, and just now I have set it up as a combo to put in the quote panel along with both credit spreads and I’m seeing negative prices on the iron condor, (for info Feb SPY 70/75/100/105 shows -1.06 -0.97) , the credit spread leg pricing is OK.

I’m not planning on closing this spread as one order but if I decided to, I guess would have to change the default price on the sell order to show a positive number as Sails mentioned ?

It's exactly how I lost 3K on a simple five lot calendar in a split second - it was a test run with IB. IB expect option traders to know this (it has a small mention in their large help files) so they won't take any responsibility if it goes wrong. I would suggest sending a ticket to CS to ask them if you should change the price - at least you have it in writing then from them...

Interesting, it's not just the Oz market then - maybe it's so do with the Hong Kong data ...

Maybe Wayne can have a look at this to see if it's the same on his TWS - I don't have US data on TWS (have it on TOS!).

 

[mazzatelli1000]

Re: Interactive Brokers and Options trading in OZ

It's exactly how I lost 3K on a simple five lot calendar in a split second - it was a test run with IB. IB expect option traders to know this (it has a small mention in their large help files) so they won't take any responsibility if it goes wrong. I would suggest sending a ticket to CS to ask them if you should change the price - at least you have it in writing then from them...

Interesting, it's not just the Oz market then - maybe it's so do with the Hong Kong data ...

Maybe Wayne can have a look at this to see if it's the same on his TWS - I don't have US data on TWS (have it on TOS!).

sails
maybe check out the large TWS manual
It has a section on the entry of combo orders and which spreads will be negative/positive priced

 

[sails]

Re: Interactive Brokers and Options trading in OZ

sails
maybe check out the large TWS manual
It has a section on the entry of combo orders and which spreads will be negative/positive priced

Thanks Mazza - although you're probably already on your way to HK!

Have found it on Page 68 of the large manual, however, it doesn't address the way TWS presents negative bid/ask quotes in the order management window as seen in the screen shots. It explains how negative/positive pricing works when transmitting orders.

The problem here is with TWS displaying negative bid/ask quotes in order management is that those same negative prices automatically populate the order windows - hence making it extremely dangerous when selling a spread for a credit unless that negative price is manually overwritten - just means another unnecessary step during the order process.

I would like to know if it is a programming glitch that is causing this or if it is something that can be configured in TWS to only have positive bid/ask quotes.

Cutz, you might want to have a look at that section in the manual as I believe you do have to change the pricing to positive if you are selling. I tried changing the price to a positive in the simulated trading though and it all locked up!

I still think it wouldn't hurt to let someone else know there appears to be a problem here. Perhaps someone might let us know how to configure TWS so the bid/ask quotes work normally every time.

I have found it much simpler to buy a spread it it's a debit and sell a spread if it's a credit. Only complicates things if buying for a credit and using negative numbers to achieve the same result.

 

[cutz]

Re: Interactive Brokers and Options trading in OZ

sails
maybe check out the large TWS manual
It has a section on the entry of combo orders and which spreads will be negative/positive priced

Thanks for the tip mazza.

Pages 68 and 69 of the PDF explain the negatives/positives numbers on the combo pricing.

Good luck in HK.

 

[sails]

Re: Interactive Brokers and Options trading in OZ

Thanks for the tip mazza.

Pages 68 and 69 of the PDF explain the negatives/positives numbers on the combo pricing.

Good luck in HK.

LOL Cutz - looks like you found it anyway

 

[cutz]

Re: Interactive Brokers and Options trading in OZ

Hi Sails,

Beat me to it.

 

[cutz]

Re: Interactive Brokers and Options trading in OZ

Hi Sails,

I think I’ve nutted out my iron condor after re-reading your post #13 and the manual, the iron condor is bought for credit therefore the spread pricing is negative so if I were to close it out as a combo I would sell for debit with a negative limit price, (buying for credit with a negative limit price if I laid it on as single order) , so in fact the negative quotes are OK, just got to refer to the manual when trading combos till I get the hang of it. ( if of course I decide to step out of my comfort zone of creating spreads a leg at a time)

And as for your calendar spread hopefully the glitches get resolved with the next software update.

 

[sails]

Re: Interactive Brokers and Options trading in OZ

Cutz, it sounds like you have it sorted by switching the buys and sells if you want to want use negative pricing. Although TWS doesn't seem to be consistent in showing either all negative or all positive bid/asks which could become confusing and potentially increase the risk of error. It seems it can flip either way when generating a combo.

Every other software I have ever used for options trading - including TOS, OX, etc all use positive bid/asks for the initial combo so it just seems to unnecessarily complicate the issue. Hopefully, there is a way to configure TWS to only show positive bid/ask. Might see if I can find anything...

 

[cutz]

Re: Interactive Brokers and Options trading in OZ

Hi Sails,

The pricing on your spreads now appear normal (without minus symbols).
You must have quite a bit of clout, i'm still waiting for XJO options to be turned on.