spread order

Spread order

An order listing the series of options that the customer wants to buy and sell and the desired spread between the premiums paid and received for the options.

Spread Order

An order to a broker to buy and sell different options on the same underlying asset but for different premiums and/or strike prices. The client who makes the spread order hopes to profit from the difference between the prices in the options sold and the options bought. See also: Spread strategy.

spread order

An order to buy and to sell options of the same class but with different strike prices and/or expiration dates in which the customer specifies a spread between the option sold and the option purchased. For example, an investor might enter a spread order to buy a March call and sell a September call, both on AOL Time Warner and with a strike price of $30, if a spread of $2 can be obtained. The order will be executed only if a floor broker can sell the September call for $2 more than the price at which the March call can be purchased.
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With this new offering, clients are able to apply custom filters to identify trading opportunities, evaluate the marketability of their orders and provide more intelligent spread order routing capabilities.
A spread order can be entered at the market or you can designate that you wish to be filled when the price difference between the commodities reaches a certain point (or premium).
smart-routing for spread orders where IB undertakes the risk of any partially executed spread order involving stocks and/or options -- direct-access bond trading with immediate best-execution on the New York Stock Exchange (NYSE), the BondDesk ECN or IB's market-making affiliate Timber Hill; -- IB SmartRouting Auto-Recovery service that automatically re-routes options orders when an options exchange experiences technical problems; -- free Secure Transaction Program (STP), with IB identity token generating one-time use passwords.
This technology is so sound that we will undertake the risk of any partially executed spread order," said Thomas Peterffy, founder and chairman of Interactive Brokers Group, the parent of global agency broker-dealer IB.
IB has also added futures to its smart-routing functionality for spread orders where IB undertakes the risk of any partially executed spread order involving stocks, ETFs, options and now futures.
Users can also click directly on a price and have it automatically populate entry fields in the spread panel, make any modifications and then enter the order as a leg of the spread order.
To enter this position, use a spread order to Buy to Open RMBS Jan 2008 5 Call, and Sell to Open RMBS Jan 2008 12.
To enter this position, use a spread order to Buy to Open MU Jan 2007 15, and Sell to Open MU Jan 2007 17.
To enter this position, use a spread order to Buy to Open BP Jan 2006 65 Call, and Sell to Open BP Jan 2006 70 Call.
Anticipatory strategies have developed to the point that they can glean the intent of traditional smart order routers, which use "price discovery" to slice and spread orders across multiple venues and over time.
CQG was one of the first Independent Software Vendors to provide server-side management of spread orders last year.