Does data/quote speed matter for ETF scalping or only for Futures scalping?

[dfd]

Hi all,

My current broker is IB and I've been reading about how their data speeds aren't the greatest (bursty, filtered non-tick data updating once every 250ms rather than true tick data), but I can't determine if this is important for ETF scalping or only for futures scalping given that the bid/ask spread on ETFs is usually a bit wider than Futures (e.g., ETFs with 70.00/70.04 spread vs. /ES with 1 tick spread). Some suggested solutions are to use IQFeed through my IB platform instead, but people also complain that IQFeed isn't filtered and is prone to occasional glitching during fast moving periods (which is the entire point of getting a fast feed, right? To more quickly ascertain proper pricing so that orders can be inputted faster) which makes me question whether that's the right solution.

I don't mind testing IQFeed out for myself to confirm whether I notice a difference, but before I go through the hassle, I have two questions that don't appear to be answered through my searching of this forum or elsewhere on the web:

(1) Should I worry about upgrading my IB data feed to a 3rd-party feed if I scalp trade ETFs with several cent spreads (e.g., 70.00/70.04) via the IB DOM but never scalp trade futures? I care very much about getting as precise quotes as possible during sudden spikes and dips in the price.

(2) If so, which solution should I be looking at? I'd strongly prefer not to switch brokerages so ideally any solution would wire through my IB account. Price is not much of a concern.

Thanks.

 

[_eug_]

I think it matters if you need accurate bid / ask transaction volume information for orderflow style of trading. I went from IB Data to Sierra Chart Data feed and I am basically looking at a totally different time and sales information. I compared them side to side. It was a $5 trial since I already use the platform and i renewed it.

 

[dfd]

Thanks. I don't use volume information because the ETFs are derivatives of futures (hence don't think ETF volume information drives future pricing).

All I care about is getting the fastest bid/ask updates possible so that I can properly input limit orders into the DOM.

 

[i960]

Thanks. I don't use volume information because the ETFs are derivatives of futures (hence don't think ETF volume information drives future pricing).

All I care about is getting the fastest bid/ask updates possible so that I can properly input limit orders into the DOM.

Then you should be fine with your current solution. The issue with IB is the tick summarization not the speed.

 

[HobbyTrading]

All I care about is getting the fastest bid/ask updates possible so that I can properly input limit orders into the DOM.

With IB you get the update on e.g. bid price immediately, without delay. Unless it then changes again within 250 ms from the first change. In that case you get the second message 250 ms after the first one. The same applies for the ask price, as these data streams operate independent from each other. Have you analysed how fast the prices change on the ETFs you are interested in?