Suppose I submit an order to open an iron condor or some other multi-leg stock option spread with multiple buys and sells.
For example, if SPY is trading at 275, I might want to:
- sell a call at 290
- buy a call at 295
- sell a put at 260
- buy a put at 255
...while specifying a limit price of $1 for the entire position.
When I submit this order, does the broker matching algorithm only look to find an opposite order that exactly matches my order? Or is the algorithm smart enough to fill the call spread and the put spread separately for a combined credit of $1? How exactly does this work?
The only explanations I have seen regarding order fills are for single legs where the matching algorithm is pretty simple and easily understood.