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Strategies & Market Trends : From the Trading Desk -- Ignore unavailable to you. Want to Upgrade?

To: steve goldman who wrote (4627)	7/10/1999 12:55:00 PM
From: Mark Z	Read Replies (1) \| Respond to of 4969

FWIW, I once received what I thought was a ludicrous fill on an option trade. I had a limit in at 4 5/8 (to sell) and was filled at 6. I immediately asked my broker about it and they basically said to accept it as good fortune. 3 days later it was adjusted back down to 4 3/4. The point is I don't think there's a one day or even settlement date time limit (options settle in 1 day I believe). I didn't gripe about things because I got my fill (they didn't bust the trade altogether) plus an extra two teenies but I did ask the broker about time limits and basically was told it was 'unlimited' i.e. conceivably they could come back a month later and adjust things. The broker was Schwab. On another note, do you know anything about a '15 minute rule' for filling spreads? Specifically, let's assume I place an order to open a spread at a net debit of 5. The ask on the long side hits 10 and the bid on the short side hits 5. I've been told the mm doesn't have to fill me unless it stays this way (or better) for 15 minutes. That is, if 10 minutes later, the long side ask moves to 10 1/8, making the natural 5 1/8, I'm not due a fill despite the natural being 5 for 10 minutes. Can you confirm this is the case? I've traded options for over a decade and after never having experienced this, I've had this happen to me repeatedly this year. I've subsequently moved to legging into spreads as a consequence. I'll generally wait until the middle of the session when things are a bit slower to minimize the risk of the underlying security moving too much. BTW, I generally don't set up a spread at high volume strikes. The long is usually well in the money and out in time and the short out of the money but closer in time so that may effect things.