IB Execution Strategy

A

AbhaySoorya

Hi all,

I'm an amateur trader, and have recently been experimenting with different order types in Interactive Brokers (IB). For general equities, IB seems to have many execution algos ranging from general Market/Limit types to quite interesting combinations (Funari, Accumulate Distribute etc.)

Just wondering if you guys can provide some advice regarding what stock order types to consider when one requires (a) fast execution or (b) cheap execution. Obviously the ideal case would be both; but to aid understanding, it probably makes sense to look at them in an isolated sense.

Please let me know your thoughts.

Regards
 
I don't know how much you know about trading equities, but you should have some experience if you're executing through IBKR. There are 50-60 places an equity order can be filled, most of which are dark pools, meaning the order book is not shown. Low-latency, high frequency traders (i.e. Flash Boys) are still active and account for most of the volume. Price discovery and liquidity is poor much of the time at shorter time intervals (e.g. intraday).

For speed of fill, Smart routed market orders and marketable limit orders (i.e. "paying up") seem to work best. If you want the best price, post a limit order and wait for the market to come to you. IB has a new adaptive algo order type that they claim can improve speed and/or price. I plan to experiment with that when I get time.

IEX may soon get approved as an exchange. When/if that happens, I may experiment with routing my orders through them.
 
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