Buying an option strategy "at once" and minimize spread: is it possible?

June 8th, 2015, 09:04 AM

Suppose I want to buy an option strategy consisting of, let's say, 4 legs (a butterfly, for example).

1) Is it possible to place an order for the whole strategy at a certain price? Let's say, I am ready to buy the butterfly for 10 dollars.

2) Or do I need to buy / sell the individual options and "pay a spread" each time?

So basically my question is whether it is possible to minimize the spread cost when buying a complex option strategy.

Thank you.

June 9th, 2015, 11:37 AM

It is possible, but dependent upon the broker and/or platform you are using. I know OptionsXpress will allow you to enter complex spread orders like butterflies as a single limit order.

This will help you get in at the price you want (minimizing slippage), but could make it more difficult if the market isn't very liquid. There are times where I will place individual orders for each leg rather than a spread order if I need to get a fill quickly.

Hope this helps.

June 9th, 2015, 08:53 PM

You can do it with TD Ameritrade and I use the Thinkorswim platform. And it does minimize commissions.

June 13th, 2015, 09:27 AM

I trade butterflies and condors as a single order through IB all the time. Option Trader has built in strategies and there is a Strategy Builder for creating other complex positions with up to 4 legs.

Buying an option strategy "at once" and minimize spread: is it possible?

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Buying an option strategy "at once" and minimize spread: is it possible?