- Interactive brokers -
I like to build bigger hedged positions (a stock hedged by an option) in relative liquid stocks and the building is not time sensitive but I want to get the best possible price. As Options have the bigger spread I want to start to buy the option on the bid and the stock on the ask.
I like to buy all volume I get on the bid of the options and if I have bought for example 5 options I like to buy 500 stocks immediately.
For this I have tried the two following concepts without success:
1st approach: Peg order to Stk (with delta hedge as second order)
As price I inputed the options bid price and the stocks ask price. This has not worked, the order was executed on moves (on the options price) against me and the peg was not moving up and down as expected.
2nd approach: Combination order under “Combinations – Options combos” and then under strategy “Buy stk/option combo”. This gives a combined price of the stockprice minus the options price (e.g. if the stock is $100 and the option .5 it shows 99.5, if I set a limit at 99.5 I do not get a fill).
On this I can see the price trading through my limit but I do not get any fill. If for example for test reason I increase my limit dramatically I get a fill at some point (but not at the shown price).
Can somebody help on this or recommend anything?
I like to build bigger hedged positions (a stock hedged by an option) in relative liquid stocks and the building is not time sensitive but I want to get the best possible price. As Options have the bigger spread I want to start to buy the option on the bid and the stock on the ask.
I like to buy all volume I get on the bid of the options and if I have bought for example 5 options I like to buy 500 stocks immediately.
For this I have tried the two following concepts without success:
1st approach: Peg order to Stk (with delta hedge as second order)
As price I inputed the options bid price and the stocks ask price. This has not worked, the order was executed on moves (on the options price) against me and the peg was not moving up and down as expected.
2nd approach: Combination order under “Combinations – Options combos” and then under strategy “Buy stk/option combo”. This gives a combined price of the stockprice minus the options price (e.g. if the stock is $100 and the option .5 it shows 99.5, if I set a limit at 99.5 I do not get a fill).
On this I can see the price trading through my limit but I do not get any fill. If for example for test reason I increase my limit dramatically I get a fill at some point (but not at the shown price).
Can somebody help on this or recommend anything?
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