Why is it harder to fill at the mid-point with my new broker?

External question — Personal Finance Stack Exchange Author: Ken - Enough about Monica Original post: https://money.stackexchange.com/questions/130514 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. My old broker (USAA) sold my accounts to Schwab. When I used USAA, I would buy options at around the mid-point, usually. The order would be filled quickly. Now that I am using Schwab, I mostly never get filled at the mid-point. I'll have to wait and bump up my bid a few times before the order will be filled. What changed between USAA and Schwab?

External answer — Personal Finance Stack Exchange Author: Bob Baerker Original post: https://money.stackexchange.com/a/130516 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Getting a fill at the midpoint is a function of there being a counterparty willing to transact at that price whether it be the market maker or another trader. That has nothing to do with who your broker is. One broker can't give you a better price than another - they're just submitting orders to the option exchanges. I have found that in some stocks whose options that I trade, the market makers split the bid more often than not. And in others, they won't even budge a nickel on a 25 cent or wider B/A spread. Chances are, you're either trading options with lower liquidity now or you're involved in some of these "won't budge" options.

External answer — Personal Finance Stack Exchange Author: Philip Original post: https://money.stackexchange.com/a/137653 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. The broker does make a difference here usually: the way the relationship between market makers, buying and selling order flow and the HFTs work on this information is fairly simple: they are looking for uninformed money where they can be relatively certain they are not trading with uninformed participants and make a reliable profit on the spread. Say you are market making a volatile stock prone to inside information that trades at a very wide spread of say $10.0 vs $12.0. Market makers here with public bids in the order book have to trade both wide spreads and low liquidity to protect themselves from informed investors of size hoovering up one side and leaving them holding the bag. However, they would be perfectly happy trading at a much narrower spread (and higher liquidity) if they knew the person(s) making the trade were uninformed, say just above/below the mid point at $10.90/$11.10. Using the order flow information they quickly see the order is from a broker without big and smart customers and jump in to match you at the mid point if your bid is anywhere near these ranges. Because of this, you will often get different fills from different brokers on mid point trades depending on how these algos evaluate the traffic and if they can even see what broker (eg some brokers don't sell order flow) it came from and it's size etc. What is strange about this is specific situation is that Schwab is a major seller of order flow so unless they have a much higher % of skilled options traffic (which would make that order flow less valuable/trustworthy) than USAA did, it doesn't make a lot of sense in this exact situation as usually Schwab's sale of this order flow helps small customers via lots of price improvement. Overall it is fairly common to see a big difference on small orders matching between brokers when submitting near the mid point as you describe due to the reasons above, but this exact specific one doesn't make much sense unless your order size or pattern has changed a lot, or something like USAA or a USAA affiliate was themselves matching your bids as a market maker.