IB TWS Users: When should I not use SMART Routing?

C

caplan8293

As I understand it, TWS's SMART routing feature is supposed to get you the best possible price that is available at all exchanges and ECN's. Can someone please explain:

1. When would someone not want to use SMART? If SMART will get you the best possible price, why would someone manually select ISLAND or any other ECN?

2. I see that TWS now allows you to exclude ARCA from SMART routing. I have seen some posts here about it but I still am not sure why people would want to do that.

Thanks in advance.
 
I'm not sure what the issues were with ARCA, but I think it had something to do with unresponsiveness.

Sometimes getting the best price is not the most important thing. Not missing a good move, or dumping a position gone bad, are a couple examples that come to mind. Depending on your commission structure, you might not want odd-lot fills, and some ECNs trade only round lots. Knowing your position (in or out) can be even more important with listed stocks where you are dealing with a specialist.
 
arca sucks. avoid em unless you trade listed and can use it to skip the floor, but that is usually only for small lots (not odd lots, just small 2k or less)
 
Here's one reason to not use SMART routing. I generally don't use it when I am placing an order for an NYSE stock. With SMART routing, I won't get any price improvement if IB does not route the order to NYSE. If it is routed to NYSE, I get price improvement perhaps 5%+ of the time. So I prefer to just drive the stock to the exchange rather that have Timber Hill fill the order. But if speed of execution is the most important factor to you, SMART does get you the best price at the moment you send the order.
 
many times i did not get fill, when i use SMART. specially on market open on nasdaq. @ open-they usually route all limit orders to island and it stays there until someone like you are match it. @ same time(let talk about sell short)-you may see many trades passed by at price ABOVE current ask. and sometimes they way above. then-price just move below you ask and you never get fill. one of the reps suggest to route order to supersoes. can this help? so looks like smart is not so smart(at least for me)
 
Quote from simsim:

Do we get billed besides the normal fees for not using smart ?
For Placing orders?
For Canceling Orders ?
More...

I believe that Equity orders do not charge an extra fee for not using SMART, but that may be different for options. I know that with the API, you are required to use SMART....
 
You must log in or register to reply here.
Back
Top