Difference between exchange data feed vs. IB TWS data feed?

[MotiveWave]

So if I write a stand alone app and send directed orders via API, IB charges an extra fee vs. sending directly from TWS. I assume that when your customers send such orders, they do not incur this extra fee because IB knows that the account is associated with some third party platform (like DAS trader). I don't know this for certain, but it would be a major deterrent if this was the case.
@MotiveWave, I assume you guys have IB Gateway running which serves all your customers so IB knows that the orders were manually submitted via your GUI(not sure how they treat SDK orders).

We don't have any special relationship with IB and we do not interfere with, collect or touch trades. Each user creates their own individual direct connection to IB. Whether you use TWS or IB Gateway when you place a trade through MotiveWave, you're using an IB API . As far as what or how IB charges users, you would have to confirm that with IB directly.

 

[Love2Trade$]

If you send orders to TWS via API. Other third party like MotiveWave use same API, but I assume that IB has an agreement with them and treat the orders as non-api.
So if you write a program to send orders via API, you will be charged extra for direct routes.

Understood, thanks as always!

 

[Love2Trade$]

@MotiveWave - Thanks for the clarifications on your end!

 

[qlai]

Anyone is using DAS trader? Do you also need to run it with TWS side by side?

 

[qlai]

Anyone is using DAS trader? Do you also need to run it with TWS side by side?

Looks like DAS has special set up with IB, so no need to run TWS side by side.

 

[NoiseTraderr]

I don't really understand how you can understand modern microstructure and be worried about IB data vs some other data you can afford.

If you are not colocated the order book gets updated faster than the data can get from the exchange to you.

I am sure there are people on the west coast paying up for data without even thinking about the latency between themselves and NYC and Chicago.

I would suggest Market Microstructure in Practice second edition. No way anyone can read that and think you need better data.

Most things I read on trading forums when it comes to microstructure is incredibly outdated.

 

[qlai]

I agree with you on all. However, there are still benefits to a good data feed:
Reliability
Quality of data
Performance consistency
Support

For some, you don't necessarily need to be the fastest ...

 

[antares66]

Thanks for point this out, I completely didn't even think of this! I want to ensure I'm understanding you correctly. Pretend I have NinjaTrader / Sierra-Charts for charting / automation and Interactive Brokers for trade execution. So I have to get a data feed (Kinetic, IQ Feed, etc) for the NT/SC platform AND subscribe to IB's L2 market data to execute the trades?

I don`t think you have to subscribe to IB`L2" market data if having a data feed with Kinetic, IQ etc which includes L2. Why should this be necessary? Do i even need a IB market data subscribtion when sending my orders with NT, Motivewave, Esignal, Sierra etc?

 

[Love2Trade$]

I don't really understand how you can understand modern microstructure and be worried about IB data vs some other data you can afford.

If you are not colocated the order book gets updated faster than the data can get from the exchange to you.

I am sure there are people on the west coast paying up for data without even thinking about the latency between themselves and NYC and Chicago.

I would suggest Market Microstructure in Practice second edition. No way anyone can read that and think you need better data.

Most things I read on trading forums when it comes to microstructure is incredibly outdated.

Sorry I thought I responded to this @NoiseTraderr ! Thanks a lot for pointing this out b/c I didn't know about the co-location bottleneck! So if a data company (eg - CQG) states that "CQG servers co-located with exchange matching engines" - does that mean I would get the speed benefits even being on the West Coast? I understand the other benefits @qlai mentioned; am specifically just asking about the speed benefit here. Here's the link where CQG states their co-location line: https://optimusfutures.com/CQG-MarketData.php

Also, is there anything else to watch out for when a company says they are co-located within the exchange? Like is it binary - either they are co-located or not - or are there degrees of co-location? Thanks a lot for your thoughts!