Tuesday, August 5, 2008

Penny Wide Options and TD Ameritrade Izone

Penny wide options are a good thing. The tighter bid/ask spread means fewer dollars lost on transaction cost.

But the problem, at least the one I have is that, there is no list (at least I can't find one) of which options trade in penny wide markets. That's just annoying.

The bigger problem is Izone (it probably affects TD Ameritrade too) doesn't seem to have the list either. So I am constantly finding trouble entering orders on options that I see quoted in penny wide due to the system not knowing it is penny wide. The system seems to think that it's nickel wide.

How hard can it be to write a program to look at the bid/ask of every single listed option to see if it is penny wide and then compare said list to the database of penny wide options? Can't be very.

Another example of large companies lacking innovation (not trying to pick on TD Ameritrade).

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