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I place option trades usually consisting of 2-4 legs...mostly ratios spreads through IB using the SMART routing algorithm. Say for a particular trade, the bid is 0.04 debit and the ask is 0.17 debit. If I am fine getting filled at 0.1 debit or better, am I better off simply placing the trade as a 0.1 debit limit order or "working" the order...starting say at 0.05 debit, let it sit for 20 seconds to 5 minutes...then if not filled try 0.06 debit...let sit..and repeat until reaching 0.1 debit? I know that there is an IB Adaptive algorithm that does something like this, but it doesn't appear to be available for options.

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  • $\begingroup$ Adaptive, REL and others are unfortunately not available for combos. According to my experience with combos trading, playing some ticks below the mid price is an effective way to get an execution with a reasonable trade-off between quickness and fairness. If you're patient enough and/or can use your own API-based orders manager, you can camp at, say, 60% * bid + 40% * ask for buy orders (the opposite for sell orders) but for less liquid stocks this could take even days before filling. $\endgroup$
    – Lisa Ann
    Aug 22, 2021 at 18:10

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