Preferencing is available with IB, so if you selected ARCA you should show up as ARCA at the high bid. That said, IB also has the 'best execution' route. Should you choose 'best execution' and enter a price placing you at the inside bid I'm told that their system works your order internally without displaying on a LII screen until it finds a match for your order. Apparently this algorithm works both MM and ECN sources for a fill. Most of my experience with IB is derived from options trades so my knowledge of their ability to handle equity trades is less than thorough at this point. I'm not thrilled by the lack of a LII display since you really have no way of knowing what is going on with your order, so I would probably choose to route my order manually.
Def,
I have used TWS for 4-5 weeks late last year. Unfortunately, I did not have good experience with it. I did not find TWS a reliable and dependable tool to trade. If I want to send my order to a particular ECN, the system should reliably send it to the ECN. If it is not marketable, display it on the book. If it is rejected, let the trader knows about that. Having the so-called "best execution" is probably good, but the fundamental of a trading software is its reliability.
1. Every brokerage claims their system is superior than others'. Why can't IB publish how it is routing the orders when using the so-called "best execution" method? I am not sure traders appreciate black-box routing. You probably have the best algorithm to route futures and options. But I thought stock trading is new to your firm.
2. I have had a few times where I entered a trade on ISLD line but they went no where and stayed greyed for the whole day. Nobody at IB knew the reason when calling the helpdesk. Even today, other folks on SiliconInvestor site are still reporting this problem.
3. The bid/ask prices and their sizes were totally out of line. When my other direct access brokers and streaming quotes were showing a few hundred shares at bid or ask prices, but TWS shown them ten times more on the same side.
4. When will IB fix TWS so it can handle systems on a shared internet connection?
5. What will IB do for its clients if a trade dispute happens, say a MM back away from his price or an order accepted by the system but no execution due to IB's routing or whatever problem? A reputable brokerage will normally acknowledge their problem and honor the trade if it is indeed the case. I have not had any luck on this with IB.
6. How are new issues (IPO) being handled now? Are they still being entered into the system manually? It took a couple days at least to show up in the system so they can be traded.
7. Quality of quotes had been very unreliable that they were either delayed or incorrect (when comparing with my other streaming quote vendors (more than one). Has this been addressed?
Thanks for your reply,
JT
I have used TWS for 4-5 weeks late last year. Unfortunately, I did not have good experience with it. I did not find TWS a reliable and dependable tool to trade. If I want to send my order to a particular ECN, the system should reliably send it to the ECN. If it is not marketable, display it on the book. If it is rejected, let the trader knows about that. Having the so-called "best execution" is probably good, but the fundamental of a trading software is its reliability.
1. Every brokerage claims their system is superior than others'. Why can't IB publish how it is routing the orders when using the so-called "best execution" method? I am not sure traders appreciate black-box routing. You probably have the best algorithm to route futures and options. But I thought stock trading is new to your firm.
2. I have had a few times where I entered a trade on ISLD line but they went no where and stayed greyed for the whole day. Nobody at IB knew the reason when calling the helpdesk. Even today, other folks on SiliconInvestor site are still reporting this problem.
3. The bid/ask prices and their sizes were totally out of line. When my other direct access brokers and streaming quotes were showing a few hundred shares at bid or ask prices, but TWS shown them ten times more on the same side.
4. When will IB fix TWS so it can handle systems on a shared internet connection?
5. What will IB do for its clients if a trade dispute happens, say a MM back away from his price or an order accepted by the system but no execution due to IB's routing or whatever problem? A reputable brokerage will normally acknowledge their problem and honor the trade if it is indeed the case. I have not had any luck on this with IB.
6. How are new issues (IPO) being handled now? Are they still being entered into the system manually? It took a couple days at least to show up in the system so they can be traded.
7. Quality of quotes had been very unreliable that they were either delayed or incorrect (when comparing with my other streaming quote vendors (more than one). Has this been addressed?
Thanks for your reply,
JT
def
Sponsor
JT,
I just saw your post and want to confirm a few things before getting back to you with a complete answer.
Just a few quick points:
Stock trading is relatively new on the retail side but we have been offering it to institutions for about 5 years. Additionaly, Timber Hill has been trading stocks electronically for 15 years or so in many markets around the world on a proprietary basis. In short, there is a great deal of experience in routing all types of orders to all types of exchanges.
The discussion groups I have followed seem to have been very favorable regarding the best execution routing.
On compensation: How can you expect a firm to grant an execution if the person on the other end does not honor their quote? Other firms may provide an execution at a worse price without you knowing it or if they are selling your order flow. Please read the comment letter on our web site regarding the exchanges turning off their auto execution systems and not honoring their quotes. As far as other types of "error", each individual case is judged on its merits and if warranted, compensation may be granted.
I believe the quality of the quotes have been addressed and on the other issues, I'll have to get back to you.
- def
I just saw your post and want to confirm a few things before getting back to you with a complete answer.
Just a few quick points:
Stock trading is relatively new on the retail side but we have been offering it to institutions for about 5 years. Additionaly, Timber Hill has been trading stocks electronically for 15 years or so in many markets around the world on a proprietary basis. In short, there is a great deal of experience in routing all types of orders to all types of exchanges.
The discussion groups I have followed seem to have been very favorable regarding the best execution routing.
On compensation: How can you expect a firm to grant an execution if the person on the other end does not honor their quote? Other firms may provide an execution at a worse price without you knowing it or if they are selling your order flow. Please read the comment letter on our web site regarding the exchanges turning off their auto execution systems and not honoring their quotes. As far as other types of "error", each individual case is judged on its merits and if warranted, compensation may be granted.
I believe the quality of the quotes have been addressed and on the other issues, I'll have to get back to you.
- def
This one is becoming like Datek.
Confirmation takes long and cancellation takes longer. Forget about getting in for fast moving stock. Reliability is still a big problem.
I had a terrble day today. Market was dropping like a rock at 3 and couldn't
connect to IB. I lost all the money I ma
during the week for that one trade.
Maybe it's time to give up...
I have been using IB for a few weeks and am very impressed with the system. YES is does have some drawbacks (unconventional methods for order entry etc) but overall is a very reliable system. I use a DSL connection and most of the time, speed is excellent and reliable.
I was pleasantly surprised that they REALLY DO only charge $1.00 per one hundred shares. /mb_html/smile.gif My previous broker was paying the rent with my trades alone. At least now I feel like I am getting a fair price and great executions.
David
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I was pleasantly surprised that they REALLY DO only charge $1.00 per one hundred shares. /mb_html/smile.gif My previous broker was paying the rent with my trades alone. At least now I feel like I am getting a fair price and great executions.
David
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I'm interested in IB and am trying to get a better feel for using their TWS (beyond the simulator)for day trading index options. Any suggestions/experiences on evaluating their system and service other than just opening an account and trading small size initially? I'm in Toronto and wondering if there's a satisfied user here that I could contact. Many thanks.
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Ros - keep in mind that no matter how fast any broker routes your index option order to the CBOE, you're still at the mercy of the floor. It's not like direct execution of equities. Anything over $10 premium must be handled by hand at the floor and even for the under $10 premium options, the option specialists can request the exchange turn off the automatic execution systems in a fast market so everything is done manually. Also, since the index options are traded only at the CBOE - you don't even get the benefit of multiple exchange competition for the trades. The CBOE's OEX guys have been extremely slow to execute orders.
ArchAngel- thanks for the input. My approach is to trade under 50 contracts at a price under $10 so I think most of the time the orders "should" go thru RAES. My hope is to speed up the front end significantly (my full service broker for example averages 3 minutes til I get a confirmed fill) and I'm trying to determine if, in fact, IB has the speed,accuracy and reliability they claim. Any further comments and experience in this regard would be much appreciated.
Not everybody may be aware that IB has copies of their SEC submissions on their website deploring the CBOE practices (eg turning off RAES under certain circumstances)and I think they deserve a lot of credit for advocating fair competition (eg multiple listings)in the options marketplace on behalf of the customer.
Not everybody may be aware that IB has copies of their SEC submissions on their website deploring the CBOE practices (eg turning off RAES under certain circumstances)and I think they deserve a lot of credit for advocating fair competition (eg multiple listings)in the options marketplace on behalf of the customer.
Ros - also be aware, that RAES will only autoexecute orders of up to 10 contracts (assuming autoexecution is enabled at the time and for the contracts you're trading). If you're looking to trade up to 50 contracts at a time, you'll need to break the orders up if you want a chance at autoexecuting.
Archangel,
I just talked with CBOE customer service trying to pin down RAES limits. They were most helpful and this is what I now understand with respect to the OEX and SPX. Both can be traded on RAES in maximum lots of 20 contracts. For the OEX the price must be no greater than $10 but for the SPX price can be up to and including $40. Given that some series of options on the Dow now trade on RAES in 100 contract lots with no price max they say they are working with the SEC to see if they can raise OEX/SPX limits in the future. However, they gave me no indication when that might happen. Now if we can just get them to stop the intermittant RAES over-rides.......
I just talked with CBOE customer service trying to pin down RAES limits. They were most helpful and this is what I now understand with respect to the OEX and SPX. Both can be traded on RAES in maximum lots of 20 contracts. For the OEX the price must be no greater than $10 but for the SPX price can be up to and including $40. Given that some series of options on the Dow now trade on RAES in 100 contract lots with no price max they say they are working with the SEC to see if they can raise OEX/SPX limits in the future. However, they gave me no indication when that might happen. Now if we can just get them to stop the intermittant RAES over-rides.......