On kind of a ho hum day I thought it would do to explain the array of trade tags that come courtesy of the option exchanges.? I am seeing the need to explain these monikers after hosting the Odd Block (2 years) and Options Oddities (100+ shows so far) for the Options Insider media empire.? The listeners have questions and I will try to answer them.
These definitions come from Livevol (r)?www.livevol.com ?and I will add my spin on each below:
Regular: Indicates that the transaction was a regular sale and was made without stated conditions.?
Translation:? A vanilla trade buying or selling with nothing attached like another contract, stock or settlement preference.? I have seen trades go up wanting early settlement to fool the liquidity providers into missing a dividend.? Tricky.
Auto Execution: Transaction was executed electronically. Prefix appears solely for information; process as a regular transaction. Transaction executed electronically. Soley for information. Only found in OPRA — options trades, and quite common.?
Translation:? Most orderflow comes through electronic execution nowadays and happens in the blink of an eye.? In the old days, pre-2002, most paper went up manually.? Essentially a human does not touch it once the order is placed until a fill comes back.? What might be interesting is AutoEx that sweeps several exchanges at once.? That means someone is in a hurry and is grabbing all liquidity at a price.
Spread: Spread between 2 options in the same options class. Transaction represents a trade in two options in the same class (a buy and a sell in the same class). Prefix appears solely for information; process as a regular transaction.?
Translation:? Spread tags go up when one order is part of another order.? Also this means an spread price can ?touch? another option order but not trip an execution.? Essentially a spread can ?touch? (trade at the same price) a resting order and not trade it if the spread contract is on the same side of the market.? This could be a reason that an order you placed did not get filled because the spread only touched your price yet did not generate a trade for you.
Straddle: Straddle between 2 options in the same options class. Transaction represents a trade in two options in the same class (a buy and a sell in a put and a call). Prefix appears solely for information; process as a regular transaction.?
Translation: Similar to a spread in that it can touch a resting order and the resting order does not trade since the straddle has to go up as 1 trade.? This is a way to get a call and put up at the same time.
Block Trade: An executed trade of a large number of shares, typically 10,000 shares or more.?
Translation:? A block usually goes up as a matched order meaning the buyers and sellers were prearranged in order to accommodate the larger size.? Smaller orders can get frozen out of a block trade meaning again a trader might see a transaction at their price and not get filled.