Want Better Execution On Options Trades? Interactive Brokers Has You Covered With One New Feature

The growth of options and their impact on underlying markets is having a significant impact on traders’ entries and exits.

To help traders better manage their entries and exits, Interactive Brokers Group Inc IBKR launched the IBUSOPT order destination. Now, clients can fill their orders in between the National Best Bid/Offer (NBBO), and improve execution.

How It Works: IBUSOPT orders are floated within the company's own ecosystem of traders, financial advisors, hedge funds and other institutional clients. The company looks to offset its clients’ orders with each other.

Further, the IBUSOPT-Pegged-to-Midpoint order type enables clients to peg their order to the midpoint of the bid-ask spread, meaning orders will be executed at the midpoint of the NBBO, or the highest bid and the lowest ask, removing the need to cross and pay the spread.

The IBUSOPT-Pegged-To-Best order, for those who want execution at the most favorable prices, enables clients to peg orders and compete by one tick with the best bid or ask price.

See Also: How To Trade Options For Beginners 

Why It Matters: “We are excited to introduce our new IBUSOPT order destination to help retail and institutional investors achieve better price execution on US options trades,” said Steve Sanders, executive vice president of marketing and product development at Interactive Brokers.

“Our history as an options market maker, coupled with our focus on advanced technology and low-cost trading solutions, puts Interactive Brokers in a unique position to address the continued demand for options trading with this innovative new feature.”

Check out this Benzinga page: Unusual Options Activity

Photo: Courtesy Interactive Brokers Group