Complex Order Book
In options trading, complex orders involve more than one options series. They typically have two legs, but they can involved three, four or more series. They come in a number of types, such as spreads, straddles, and combinations. A package could include two calls, two puts, or a put and a call. Complex orders can also be made up of an option and shares of the underlying stock.
Multi-leg trades have been around as long as options have been traded, but in the past ten years they have moved from the floors to electronic trading systems. Traders post complex orders on the books as a package, quoting a single net price. The prices are typically better than would be obtained by trading the component legs separately.
Brokers use complex order books (COBs) primarily for small orders of no more than 20 or 30 contracts, while sending the larger orders to market makers or to exchange floors.