Spread Issues

[cwelsh 1,549]

So I just got off the phone with TDAmeritrade because I had realized a very odd discrepancy.

 

On the EXACT same trade (involving an SPY diagonal), the bid/asks between TDAmeritrade and Interactive Brokers was significantly different.

 

On the specific trade I was looking at TDA was quoting a $4.23 midpoint, on a  $4.30/$4.16 spread.

 

On the exact same trade, IB was quoting a spread of $3.80/$3.58.

 

I opened the trade on IB with a price of $3.64 and was filled instantly. 

 

I then opened the same trade on TDA, quoting the same $3.64 price.  It has sat for the last 30 minutes.

 

I verified that the trade was the same about 100 times and called TDA.

 

I then emailed and pdfed them a copy of the transaction (including time stamp and prices) from IB while talking to them. 

 

There comment was "this cannot possibly be correct" and that they "will immediately look into it."

 

I have questions, maybe someone here has answers:

 

1.  Has anyone else ever noticed that?  (I've seen .05 spread differences, but that can be accounted for from routing systems to how trades are matched to quote feeds);

 

2.  Any idea how this could possibly happen?

 

3.  Does this concern anyone else as much as me on the fills we might be getting on one platform over the other?

[red_bp 0]

I've seen this sort of thing, yes.  I have kept accounts open (with only $500 in them) at a couple brokerages just to "check" options prices when this sort of thing happens.  The ones I have accounts and check are TDA, OX (OptionsXpress), ETrade.  If those are different, I have pulled up my old Scottrade account to verify.  Often the weird one is ETrade.  TDA and OX tend to be the same (and Scottrade when I double check with it).    I opened the TDA account so I could get away from the Etrade account, but I'm not thinking its much different. 

 

Often I can't get filled on ETrade but no problems with OX.  My experience with TDA is thin, but like ETrade I've had problems with getting complex trades filled.  I've only done basic options trading with Scottrade (and that was a couple years ago) so can't comment there.  One of the reasons I keep the Scottrade account is that I used to short stocks (yes, I'm one of them) and I had better liquidity with ST than ET for shorting stocks.   

 

I'm always concerned when I get the impression the brokerage is behaving like a bucket shop, yes.