Hidden Orders
- Thread starter CodeX
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I've actually been wondering the same thing. From some empirical observation just on IB, I feel like when I use hidden orders routing with IB Smart, I feel like I'm not 100% hidden. Sometimes someone will step in front of my order, or there's a greater chance I won't get a fill. I get better results with hidden orders when routing to ISLAND / Nasdaq. My theory on sending hidden orders via IB Smart, or routing hidden orders to certain other venues is that the hidden order will still get flashed to some market makers. Anyway, I don't believe that the order is visible in the order book, but doesn't mean that there aren't market participants that will know about it.
Anyway, that's just my working theory, but I do use hidden orders quite a bit.
no idea, but i've found them near useless. you will most likely be filled when you could have gotten a BETTER price by waiting.
I "feel" that there's a little less adverse selection with a hidden order than a displayed resting order (e.g. with a displayed order, you're more likely to get hit if the price is going to move against you anyway, and less likely to get a fill if the price is moving in a favorable direction). Also, if the spread is large, someone will frequently step in front of your displayed order. Anyway, I never researched this in-depth so this is just based on gut feel.
That being said, I'm usually a liquidity taker so this is pretty situational. I just prefer using a hidden order over a displayed resting order.
In theory they are completely hidden from everyone but in practice I have seen some weird shit, like really weird stuff.
Just the other day I was trying to cover a short and the bid was at something like 55.22 the ask was at something like 55.45
I put my hidden order at 55.30 and then the bid moves up exactly to my price level. Maybe it was a coincidence maybe it was not. I don't know but a lot of the times I'm forced to use them because a displayed order will be gamed even more often.
When using a hidden order use multiple ECNs/Exchanges (break the order down in smaller parts for each ECN), because they can be traded through. They only execute against the order flow of the ECN they are sitting at
Just the other day I was trying to cover a short and the bid was at something like 55.22 the ask was at something like 55.45
I put my hidden order at 55.30 and then the bid moves up exactly to my price level. Maybe it was a coincidence maybe it was not. I don't know but a lot of the times I'm forced to use them because a displayed order will be gamed even more often.
When using a hidden order use multiple ECNs/Exchanges (break the order down in smaller parts for each ECN), because they can be traded through. They only execute against the order flow of the ECN they are sitting at
There are orders that are truly hidden, like the non displayed orders at mayor markets (like NSDQ) or the orders sitting at darkbooks that have no routing.
then there are orders that do go to darkbook routers, which try to find liquidity for your order across a range of darkbooks and liquidity providers... the problem with this approach is that in order to find liquidity they have to make your order a little less hidden, and every time they ping a liquidity provider looking for shares they may be giving away information.
then there are orders that do go to darkbook routers, which try to find liquidity for your order across a range of darkbooks and liquidity providers... the problem with this approach is that in order to find liquidity they have to make your order a little less hidden, and every time they ping a liquidity provider looking for shares they may be giving away information.
IB Help desk: "for example to place a $100 buy limit order for 100 shares AAPL, when market ask price is 101, it wont sent to exchange, when it is 100 at ask price, it will sent to exchange and fill it"
They call this marketable. Hidden is simply not being sent to the exchange until marketable.
They call this marketable. Hidden is simply not being sent to the exchange until marketable.
No. They are talking about Native Hidden orders, the example you gave are of IB hidden orders (broker hidden orders). These 2 are very different
It is an old thread... today there is the Bookmap option. It has a feature that shows iceberg orders on the chart.
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Thanks, but can you decrypt this for us? what we looking at here?