ib must be selling order flow on options

M

monstercat

i've now noticed this 4 are 5 times. i have an account with ib and another outfit. today yet again i tried to buy some options that were $6.20x$6.40 at $6.30. i used ib's smart order thats supposed to route to the best fill. well i became the bid. so i stuck the same order in at $6.30 with the other firm and got an instant fill at $6.30 which was showing as the bid because of my order at ib. this has happened at least 5 times. it means ib''s selling the order flow and not giving me the best price
 
just got off the phone with ib. they routed to cboe and i got filled with the other firm on the ise. with smart order ib has the abilty to route were they want. anyway i've noticed this a lot now with ib. funny thats why i left mb trading a year ago as they pulled the same crap never giving me fills in between and selling the flow. they refused to tell me how they routed
 
Quote from monstercat:

i've now noticed this 4 are 5 times. i have an account with ib and another outfit. today yet again i tried to buy some options that were $6.20x$6.40 at $6.30. i used ib's smart order thats supposed to route to the best fill. well i became the bid. so i stuck the same order in at $6.30 with the other firm and got an instant fill at $6.30 which was showing as the bid because of my order at ib. this has happened at least 5 times. it means ib''s selling the order flow and not giving me the best price
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The NBBO is 6.2 at 6.4.
You submit the bid to buy at 6.3.
You become the new NBB.

I do not see what is wrong with that. Could you please clarify?

Thank you.
 
ibsoft whats wrong with it is i'm obviously not the best bid. THEN HOW AM I'M CONSTANTLY GETTING FILLS TO BUY AT THE $6.30 WITH MY OTHER BROKER? EVEN WHEN I BECOME THE BEST BID AT $6.30 I GOT 3 STRAIGHT FILLS TO BUY AT $6.30 WITH THE OTHER BROKER. THE ORIGINAL QUOTE WAS $6.20 X $.6.40. WHY IS THE OTHER BROKER GIVING ME FILLS IN BETWEEN AT $6.30 AND IB IS NOT? YOU STUCK ME ON THE CBOE FOR A FILL AND THE ISE FILLED IT WITH THE OTHER BROKER. and this is not a one time event as its happened a ton of times to be honest. what dictates were ib puts my order on smart orders? its obviously not getting me the best fill are i wouldn't be getting better fills elsewere, IS IB RECIEVING ORDER FLOW PAYMENTS ON OPTIONS?
 
Quote from monstercat:

ibsoft whats wrong with it is i'm obviously not the best bid. THEN HOW AM I'M CONSTANTLY GETTING FILLS TO BUY AT THE $6.30 WITH MY OTHER BROKER? EVEN WHEN I BECOME THE BEST BID AT $6.30 I GOT 3 STRAIGHT FILLS TO BUY AT $6.30 WITH THE OTHER BROKER. THE ORIGINAL QUOTE WAS $6.20 X $.6.40. WHY IS THE OTHER BROKER GIVING ME FILLS IN BETWEEN AT $6.30 AND IB IS NOT? YOU STUCK ME ON THE CBOE FOR A FILL AND THE ISE FILLED IT WITH THE OTHER BROKER. and this is not a one time event as its happened a ton of times to be honest. what dictates were ib puts my order on smart orders? its obviously not getting me the best fill are i wouldn't be getting better fills elsewere, IS IB RECIEVING ORDER FLOW PAYMENTS ON OPTIONS?
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I do not know how the other broker is giving you fills at 6.30.

IB is routing the non-marketable orders in non-penny options to the exchange with good liquidity. CBOE definitely qualifies for that.

IB is not selling the order flow.
 
Quote from monstercat:

ibsoft whats wrong with it is i'm obviously not the best bid. THEN HOW AM I'M CONSTANTLY GETTING FILLS TO BUY AT THE $6.30 WITH MY OTHER BROKER? EVEN WHEN I BECOME THE BEST BID AT $6.30 I GOT 3 STRAIGHT FILLS TO BUY AT $6.30 WITH THE OTHER BROKER. THE ORIGINAL QUOTE WAS $6.20 X $.6.40. WHY IS THE OTHER BROKER GIVING ME FILLS IN BETWEEN AT $6.30 AND IB IS NOT? YOU STUCK ME ON THE CBOE FOR A FILL AND THE ISE FILLED IT WITH THE OTHER BROKER. and this is not a one time event as its happened a ton of times to be honest. what dictates were ib puts my order on smart orders? its obviously not getting me the best fill are i wouldn't be getting better fills elsewere, IS IB RECIEVING ORDER FLOW PAYMENTS ON OPTIONS?
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Maybe your other broker is routing your order to the ISE?

IB's smart router put the order on the CBOE. IB isn't receiving ORDER FLOW PAYMENTS ON OPTIONS, but it MAY be routing the order to the CBOE because Timber Hill is the DPM in the option that you were trading.
 
I don't see what you're upset about either. If you don't want your limit bid on CBOE you can direct it to ISE. If there was an offer at 6.30, IB would have taken it. Instead, it appears someone hit your 6.30 bid on ISE. The same thing could have happened on CBOE. If you have Lev II options display, you can see exactly what the depth is on each exchange at each level and choose where to send it.

I may be missing something, but I don't see any reason to be upset at IB or to think they deliberately routed your bid unfairly. How would they know someone was waiting to hit a bid at 6.30 on ISE?
 
i'm using smart orders with both brokers. there was no ask to buy at 6.30. it was 6.20x6.40. technically ib did nothing wrong. i'm just asking why time and time again the routing of some other brokers are getting smart order fills when ib's not?whats so darn funny is when i put the bid in at ib to split it the bid and ask the quote became 6.30x6.40 and i stuck and order 3 times in a row in at the other broker at 6.30 and got instant fills at 6.30. i've been with ib for a long time and have never had a problem with them
 
Quote from monstercat:

IS IB RECIEVING ORDER FLOW PAYMENTS ON OPTIONS?
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Yes, of course they are. They disclose this in the docs you
signed to open an account and also on their website. All
option exchanges, AFAIK, compensate for order flow. IB
is a major recipient of these payments. It is one of the
main reasons they charge less for "smart' routing.

"Smart" routing is smart for IB, not for you.

Who is your other Broker, the one who got you the good
fills on the ISE?

ISE is definitely better than CBOE. AMEX and PHLX are
dens of outright theives.
 
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