Best price on 5000 options contracts day.

[jimrockford]

Quote from kjsnow25:

the decision where to route should only take an instant, yes, but I believe it is your website that mentions 10 seconds. I think most of us here are aware to check all the regionals, etc, it can take time. If you're just going to best of book, maybe, sure, it could be quick. But give others here the benefit of the doubt that it's not millisecond instant in option land.

The Interactive Brokers website explains the following, with respect to SMART routing of options:

If the order remains marketable at a venue for more than 10 seconds without executing, and it is also
marketable at other destinations, the order is cancelled at its current venue, the venue is removed from
routing consideration, and the order routing decision process begins again.

This shows that the 10 second delay, when it occurs, is not introducted by IB's smart-router. It is instead the fault of an options exchange. IB then acts to minimize the delay by re-routing the order. Your criticism of IB confuses the facts and makes it sound like the delay is IB's fault, when in fact, IB is not at fault.

http://www.interactivebrokers.com/en/trading/IBSmartRoutingOptions.pdf

 

[kjsnow25]

there is no criticism, I'm saying that "smart routing", if I'm to believe what is writtn, and what you say, introduces latency into the equation.

That's my point. Anything any broker ever (including the infallable IB and others just as great) does to "try to help" slows thigs down.

Again, this is most likely the reason that anyone writing their own program for this type of trading goes direct.

Don't think I'm saying anything I'm not. that's all I stated.

 

[def]

Quote from kjsnow25:

there is no criticism, I'm saying that "smart routing", if I'm to believe what is writtn, and what you say, introduces latency into the equation.

That's my point. Anything any broker ever (including the infallable IB and others just as great) does to "try to help" slows thigs down.

Again, this is most likely the reason that anyone writing their own program for this type of trading goes direct.

Don't think I'm saying anything I'm not. that's all I stated.

If you're writing a program to determine which exchange to route to, aren't you then introducing the latencies you mention above into the equation? Either way, those latencies are are negligible - if any at all - as the decision to route can be dynamically updated and already be determined before you decide to send an order.

 

[kjsnow25]

isolating the brokers part of the equation for latency is what programmers want to do. They don't want to be told that the broker's smart router is nifty. They want to isolate exchange latencies, broker latencies, and overall latencies contributed by where servers are, etc.

It's up to the programmer on routing to maximize his strategies. The crowd on this thread that needs to defend a generic trader vs. a programmer, well, I hear your points, but defending that guy vs. a programmer - which is who started this thread, has become a bit difficult.

Direct routing is more expensive in options on IB than using the smart router. Switching away from that introduces latencies, at a lower cost. Enough said on this, it was really my only point.

 

[alanm]

I think the point is that the latencies involved in deciding which option exchange has the best price aren't within two orders of magnitude of your suggested 10 seconds, and aren't significantly different than the decisions involved in stock routing. It comes down to a few hundred cycles of a multi-gigahertz clock at most. Multiply that by hundreds or thousands of simultaneous orders, it's still relatively nothing.

When talking about handling an order after the original submission to deal with market movements and re-routing, it's got to be faster to do it on the broker's order server than on your own machine because of the elimination of the extra round-trip of quote and order latencies. Even if your machine is co-located, the broker's order server would have to be severely overloaded to make up for even those single-digit-millisecond round-trips.