I’ve noticed that sometimes in my paper account limit orders for buy or sell option contracts, they are filled at more favorable to me price than the limit. Is this normal behavior and can it be expected in live account as well?
This is happening due to price improvement and can happen in live trading as well. You can read more about here.
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Thank you for the answer. Still its seems to good to be true in my case as more than a half trades were like this. Below are actual trades on my paper account for the March taken from Alpaca api. If limit price be used than it was total -8%, if filled_avg_price -3% I doubt it would be as good in live, maybe someone could give more explanation…
3/3/2025 12:34 PM SPY250314C00591000 buy_to_open limit 10.09 filled_avg_price 9.95
3/3/2025 12:41 PM SPY250314C00591000 sell_to_close limit 10.08 filled_avg_price 10.09
3/5/2025 2:50 PM SPY250314C00580000 buy_to_open limit 10.67 filled_avg_price 10.67
3/5/2025 2:51 PM SPY250314C00580000 sell_to_close limit 10.81 filled_avg_price 10.81
3/10/2025 11:51 AM SPY250318C00568000 buy_to_open limit 7.63 filled_avg_price 7.63
3/10/2025 11:54 AM SPY250318C00568000 sell_to_close limit 7.71 filled_avg_price 7.71
3/11/2025 1:18 PM SPY250317C00554000 buy_to_open limit 8.33 filled_avg_price 8.33
3/11/2025 1:25 PM SPY250317C00554000 sell_to_close limit 7.73 filled_avg_price 7.74
3/13/2025 12:34 PM SPY250318C00549000 buy_to_open limit 9.18 filled_avg_price 9.16
3/13/2025 12:36 PM SPY250318C00549000 sell_to_close limit 9.27 filled_avg_price 9.27
3/17/2025 2:28 PM SPY250328C00570000 buy_to_open limit 6.72 filled_avg_price 6.71
3/17/2025 2:33 PM SPY250328C00570000 sell_to_close limit 6.79 filled_avg_price 6.8
3/18/2025 3:12 PM SPY250404C00555000 buy_to_open limit 13.46 filled_avg_price 13.42
3/18/2025 3:14 PM SPY250404C00555000 sell_to_close limit 13.59 filled_avg_price 13.59
3/21/2025 2:20 PM SPY250404C00560000 buy_to_open limit 10.81 filled_avg_price 10.81
3/21/2025 2:26 PM SPY250404C00560000 sell_to_close limit 10.33 filled_avg_price 10.36
3/24/2025 1:53 PM SPY250417C00571000 buy_to_open limit 11.94 filled_avg_price 11.94
3/24/2025 2:00 PM SPY250417C00571000 sell_to_close limit 11.85 filled_avg_price 11.86
3/27/2025 1:42 PM SPY250417C00568000 buy_to_open limit 9.74 filled_avg_price 9.74
3/27/2025 1:46 PM SPY250417C00568000 sell_to_close limit 9.84 filled_avg_price 9.84
3/27/2025 2:32 PM SPY250417C00566000 buy_to_open limit 11.37 filled_avg_price 11.37
3/27/2025 2:33 PM SPY250417C00566000 sell_to_close limit 11.48 filled_avg_price 11.48
3/31/2025 11:02 AM SPY250404C00555000 buy_to_open limit 5.41 filled_avg_price 5.36
3/31/2025 11:07 AM SPY250404C00555000 sell_to_close limit 5.4 filled_avg_price 5.43
3/31/2025 11:41 AM SPY250417C00563000 buy_to_open limit 6.06 filled_avg_price 6.02
3/31/2025 11:46 AM SPY250417C00563000 sell_to_close limit 5.94 filled_avg_price 5.94
3/31/2025 11:50 AM SPY250417C00550000 buy_to_open limit 13.07 filled_avg_price 13.07
3/31/2025 11:55 AM SPY250417C00550000 sell_to_close limit 13 filled_avg_price 13.02
It generally is too good to be true. Unfortunately, developing an options strategy via paper trading will never be feasible unless you are using a highly liquid (SPY, SPX, QQQ) etf or index and trade via market orders. It will never get close to actual liquidity and fills otherwise.
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