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 Price Improvement Auction Orders  ~ for Options


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Box Routed Options Orders: 

For option orders that are specifically routed to the Boston Options Exchange (BOX) you may elect to participate in the BOX's price improvement auction in pennies (with the goal being to better your price). All BOX-directed price improvement orders are immediately sent from Place Trade to the BOX order book, and when the terms allow, PT will evaluate it for inclusion in a price improvement auction based on price and volume priority. In the auction, your order will have priority over broker-dealer price improvement orders at the same price.  

Order Type Characteristics1

Products Availability Routing TWS
Options           US Products Smart         Attribute           
  Non-US Products      Directed      Order Type        
        Time in Force

 

View Supported Exchanges  Open Users' Guide

 

Enter your order price in penny increments, and it will be rounded to the nearest listed increment in favor of the order (bids and offers will continue to be listed in increments of $0.05 or $.10) until the start of the auction. Should an auction start, your improvement amount will be the absolute difference of your order price in pennies and your rounded listed price.

Place Trade's customers submitting Smart marketable options orders will have their orders routed to BOX when BOX is at the NBBO, and Place Trade has information that there is an NBBO improvement order on the opposite side of the trade, in which case your order will be exposed to a price improvement auction.

 

Quick Tips:
 

How to submit a Price Improvement Auction Order - Limit, Relative & Pegged to Stock

 

  1. Create an options order routed to BOX.
  1. In the Type field, select either LMTREL, or PEG STK.
    • For Limit orders, enter the limit price in the Lmt. Price field in penny increments.
    • For Relative orders, set a relative offset amount (in penny increments) in the Aux. Price field.
    • For PEG STK orders, you enter the starting price in the Aux. Price field, the delta in the Delta field, the optional stock reference price in the Stock Ref. Price field, the low side of the optional stock range in the Underlying Range (Low) field, the high side of the optional stock range in the Underlying Range (High) field. Use the Order Ticket, or display these fields from the Order Columns tab in page layout.
  1. Transmit the order by clicking the "T" in the Status field.

For a more detailed description of box auction orders, visit the Order Types information page.

Open Users' Guide 

Order Types

Limit: A buy or a sell order at a specified price. Use of a limit order ensures that you will not receive an execution at a price less favorable than the limit price. Enter limit orders in penny increments with your auction improvement amount computed as the difference between your limit order price and the nearest listed increment.

Relative: A buy or a sell order that is set at a fixed offset to the current NBBO (National Best Bid Offer). A buy order price is specified at an offset higher than the current NBB (National Best Bid), and a sell order price is specified at an offset lower than the current NBO (National Best Offer). If you do not enter an offset it will be assumed to be zero. Enter offsets in penny increments which will be used as your auction improvement amount.

Pegged to Stock: A buy or a sell order that adjusts the order price by the product of a signed delta (which is entered as an absolute and assumed to be positive for calls, negative for puts) and the change of the option's underlying stock price. A buy or sell call order price is determined by adding the delta times a change in an underlying stock price change to a specified starting price for the call. To determine the change in price, a stock reference price (NBBO midpoint at the time of the order is assumed if no reference price is entered) is subtracted from the current NBBO midpoint. A stock range may also be entered that cancels an order when reached. The delta times the change in stock price will be rounded to the nearest penny in favor of the order and will be used as your auction improvement amount.

 

How to submit a Price Improvement Auction order - Limit, Relative & Pegged to Stock

 Example

 
 
 
 

How to enter a Limit Order:

To enter a limit order, select limit order in the Type field and enter a limit price. As an example, if the market was $2-2.10 and you wanted to enter a buy limit order at $1.97 you would enter:

 
Order Type: Limit
Limit Price: 1.97
Aux Price: N/A
 

If the bid on BOX moves to $1.95, and if an auction were to start, you would immediately bid $1.97 in the auction.

How to enter a Relative Order:

To enter a relative order, select Relative in the Type field and enter an offset. For example, if the market was $2-2.10 and you wanted to enter a sell relative order with a $.04 offset, you would enter:

 
Order Type: Relative
Limit Price: N/A (Optional)
Aux Price: .04 (Offset)
 

If the listed offer moved to $2.05, and if an auction were to start and the first auction offer was $2.04, your auction offer would then be $2.03. Your auction price would continue to improve the auction by $.01 until you reached $2.01.

How to enter a Pegged-to-Stock Order:

 

To enter a Pegged-to-Stock order, select Pegged in the Type field and enter a starting price, then enter a stock reference price (optional), and a stock range (optional).

For example if the market was $2-2.10 and you wanted to enter a buy pegged-to-Stock call with a starting price of $2.05, a delta of .5, a stock reference price of $100, and a stock range of $98-$102, you would enter:

 
Order Type: Pegged-to-Stock
Limit Price: N/A
Aux Price: 2.05 (Starting Price)
Delta: .5
Stock Reference: 100
Stock Range (Low): 98
Stock Range (High): 102
 

In this case, your bid would be entered at $2.05. If the NBBO midpoint price of the stock went to $100.05 your bid would be $2.06, and would continue to move up until you reached $2.07 (the .5 delta times $.05 stock move rounded down to the nearest increment). If the NBBO midpoint price of the stock were to go above $102 or below $98, the order would be cancelled.

 

Please Note:

Any stock or option symbols displayed are for illustrative purposes only and are not intended to portray a recommendation.

1The Reference Table at the top of the page provides a general summary of the order type characteristics. The checked features are applicable in some combination, but do not necessarily work in conjunction with all other checked features. For example, if Options and Stocks, US and Non-US, and Smart and Directed are all checked, it does not follow that all US and Non-US Smart and direct-routed stocks support the order type. It may be the case that only Smart-routed US Stocks, direct-routed Non-US stocks and Smart-routed US Options are supported.

 

 View All Order Types & Algos Mid-Point Peg order, Mid-Point. midpoint, mid point, Peg order, MPPO, Advanced Order Types, All or None, AON, Auto Trailing, Stop Block, Bracket, Box Top, Conditional, Discretionary, Hidden, Iceberg/Reserve, ISE, Stock Exchange, Midpoint Match, Limit + Market, Market with Protection,

More than 50 Ways to Place a Trade!

Minimum Quantity, One-Cancels-All, OCA, Passive Relative, Pegged-to-Market, Pegged to Midpoint, Pegged to Stock, Price Improvement Auction, Relative, Pegged-to-Primary, Relative + Market, Sweep-to-Fill, Stop Order with Protection, Trailing Stop, Trailing Stop Limit, Trailing Market if Touched, Trailing Limit if Touched, Trailing Limit + Market, Trailing Relative + Market

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