IB Listed Trading - a word of warning

P

Phlub

Just thought I would pass along a recent experience.

Had a Stop Buy loaded above the market in a listed stock which I routed SMART. After the price was triggered, the NYSE put up a bad quote. I believe that they meant to put 56 at 56.10. Intead they flashed 56 at 57.10. At this point, IB's "Smart" routing starting filling my orders at any and all offers that is could find. In this case, it was 56.49 - which happened to be where ARCA was offering stock. NYSE immediately went offered at .08 and proceeded to trade back to the figure never trading above that price the rest of the day. When I called to complain, ARCA would NOT make the bust because for a split second, ARCA WAS the best offer available. Of course, the genius at IB's reply was "the high of the day was 56.49 - what is the problem".

So - lesson learned. Do not use SMART routing when you have an away from the market Stop in NYSE issues.
 
use Super DOT

this is why you should not trade "all electronic"

i accidently closed all my openings trades with "smart route" limit orders this morning. i was wondering why i wasn't getting filled even though my bid price was traded on NYSE and where my price improvements were.

people like you get the ripoff fills. 40-60cents off the last price on a 50bucks stock is still within the legal parameters i believe.

i see things like this happen quite frequently. it usually happens when some moron was probably looking at a 20min delayed quote & entered an order at those prices. it happens to be out of market but in favor of the person taking the opposite side.
 
Quote from Phlub:

Just thought I would pass along a recent experience.

Had a Stop Buy loaded above the market in a listed stock which I routed SMART. After the price was triggered, the NYSE put up a bad quote. I believe that they meant to put 56 at 56.10. Intead they flashed 56 at 57.10. At this point, IB's "Smart" routing starting filling my orders at any and all offers that is could find. In this case, it was 56.49 - which happened to be where ARCA was offering stock. NYSE immediately went offered at .08 and proceeded to trade back to the figure never trading above that price the rest of the day. When I called to complain, ARCA would NOT make the bust because for a split second, ARCA WAS the best offer available. Of course, the genius at IB's reply was "the high of the day was 56.49 - what is the problem".

So - lesson learned. Do not use SMART routing when you have an away from the market Stop in NYSE issues.
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With IB, I route all my stops directly to the nyse. Works well.
 
I've been "bitten" by this more than once. For listed I route to NYSE only. No "SMART".

The problem with smart and stops is that some random ECN can trigger the stop and you'll then get a fill you didn't intend. I have not seen the NYSE put out wrong quotes (yet).
 
Not to deny anyone's personal experience, but I can't quickly calc the number of listed shares we've moved (millions upon millions) just in the last few months using SMART with no problems.

Considering others experiences, I guess one must decide whether the added liquidity and accompanying relative chaos is worth the trade-off.

JB
 
Quote from Turok:

Not to deny anyone's personal experience, but I can't quickly calc the number of listed shares we've moved (millions upon millions) just in the last few months using SMART with no problems.

Considering others experiences, I guess one must decide whether the added liquidity and accompanying relative chaos is worth the trade-off.

JB
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Mr. Turok,

As a BD it is not "your money" that is at risk like the retail customer. The retail customer is concerned because it has an effect upon not only his wallet but his mental attitude as well. You as a BD could care less because it is not your money at risk.

So the increased liquidity is a very sharp double edged sword. The retail person is at a disadvantage because if he complains the "establishment" turns a deaf ear since his small amount would not even be lint in their pockets, but let it be an institution and the game changes drastically.

What the thread starter is asking for is a level playing field, but that will never happen as long as organizations like the NASD self police aka "FOX WATCHING THE CHICKENS" and arbitration is the only choice the retail customer has.
 
I was not trying to make any kind of statement about "level playing fields, etc." I used to be a market maker myself (regional and Nasdaq) so I know ITS trade through rules backwards and forwards.

I was just commenting that IB's SMART logic in NYSE Stocks that are lower in volume (Such as my BG example), are suspect to these kinds of experiences (bad quotes like what NYSE did). And, the SMART logic does not factor this in.

Another person said that this feature can serve you well - and you are correct as long as the stock has a ton of liquidity on the ECN's and regionals. Another person said - be warned! He directs orders in stocks like BG to NYSE - NOT SMART. That is moreless the point of the post.

(BTW - now that I identified that stock from my example, please excuse my error - I said I was filled at 56.49 - what I meant was 58.49. If you look at the chart on Wed, you can see the 52-week high of 58.49 this little IB episode falsly created!)
 
i used to use IB and then I smartened up and realized that I get what I pay for. I am pretty price savvy, but rock bottom prices mean rock bottom routing and service
 
SPAMMER..... on how many threads are you going to post about cobra trading?

For your information, IB is a solid well respected broker and you will find no sympathy here on ET with your slams against IB.
 
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