Yes, but I have my questions as well--as in my posting.
If your brokerage is the counterparty to your trades...
- Thread starter Option Trader
- Start date
This is not what I am alluding to. I'll try to simpify. For example the current bid is 10.00 and 100 shares are available at this price. The current ask is 10.01 and there are 200 shares available at the ask price. With IB if you place an order to sell your 100 shares at 10.00 which is the current bid price, instead of getting an immediate fill at 10.00, IB will post your order as the inside offer at 10.01. By doing this IB will get paid rebates for adding to liquidity and if your order is filled you will end up selling your 100 shares at 10.01. You get a price improvement of a penny. However, what is important here is the fact that IB did not do what you instructed it to do - Which was to lift the inside offer at 10.00 where 100 shares were available. Instead it was looking after its own interests by earning rebates through adding a penny to your order to sell at 10.00 and posting your order at the inside offer at 10.01.
As regards Timber Hill the process starts after your order is filled. For example you placed a 1000 share order to buy AAPL at 165.00 and were filled at 165.00 for 1000 shares. You now try to sell your 1000 AAPL shares for 165.12. Timber Hill will do what I outlined in my earlier post making it difficult for you to sell at 165.12. The emphasis here is on large orders. If it is 100 shares or so you won't see this happen as frequently.
I would suggest that you try it on your own and see what results you come up with. Unless IB changes its routing algorithms you should come up with the same end result that I came up with and have continued to experience till date.
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ak15, FALSE FALSE FALSE... No truth to your comments.
Timber does NOT repeat NOT see IB orders. This has been hashed out many many times. Timber will add liquidity and becomes part of the NBBO for SMART but first and foremost obtaining the best price for clients is our aim. Our routing stats show this and on the options side an independent group confirmed that IB provides significantly better price improvement relative to the industry avg (14.85% vs .57%).
OptionTrader, just to repeat so this is very clear. The Timber Hill trading side doesn't obtain details of the counter party of the trade if it is an IB client and decisions aren't being made based upon IB order flow.
Timber does NOT repeat NOT see IB orders. This has been hashed out many many times. Timber will add liquidity and becomes part of the NBBO for SMART but first and foremost obtaining the best price for clients is our aim. Our routing stats show this and on the options side an independent group confirmed that IB provides significantly better price improvement relative to the industry avg (14.85% vs .57%).
OptionTrader, just to repeat so this is very clear. The Timber Hill trading side doesn't obtain details of the counter party of the trade if it is an IB client and decisions aren't being made based upon IB order flow.
So is IB a direct access broker where the customer sends their own orders to the exchanges or not??????????.........how about other firms like TERRANOVA trading????? ............it's a known fact that the discount brokers like E-trade sell your order flow; but are these other direct-access brokers doing the same????
Can a customer see their order immediately posted on the level 2 screen at the price they entered?
Can a customer see their order immediately posted on the level 2 screen at the price they entered?
If this is true, I'd be interested to see the proof. Couldn't you prove this by citing the audit trail?
I hadn't ever seen anything like that in my own IB orders, that's why I asked him for some proof from the audit trail.
What he was saying about AAPL also seems a bit strange since the stock is so liquid.
Back in 2005-2006 I traded GOOG almost exclusively in 500-1000 lot sizes when the stock was trading in the high 300s to 500/share.
My broker is E-trade and I would say I saw the price of the stock go up significantly within 25 seconds of me selling fairly big lots of stock. This happened about 80% of the time or more. This behaivor was so consistent that instead of selling 1000 shares in a limit order all at one time I would have to have two order blanks filled out for 500 share lot sales at say .45/share difference in price; and then would sell the first lot and then consistently be able to sell the second lot at the higher price. It was as if their was a computer program somewhere watching for daytrading orders comming through and then market manipulation after to "punish" the daytrader for having sold a big lot. One time I was able to parlay the price increase up the price scale by selling the second lot which led to another immediate price increase into which I then sold the third lot.
We know that the MMs that all make up the NASDAQ can and do trade against daytraders.........but do we have to be on the lookout for our own broker's MM tradin against us? I realize that I'm really just buying and sellin lots of stock with E-trade especially when using their automatic routing, but it would seem that that shouldn't affect profitability TOO much unless the data stream they provide to me is altered.
My broker is E-trade and I would say I saw the price of the stock go up significantly within 25 seconds of me selling fairly big lots of stock. This happened about 80% of the time or more. This behaivor was so consistent that instead of selling 1000 shares in a limit order all at one time I would have to have two order blanks filled out for 500 share lot sales at say .45/share difference in price; and then would sell the first lot and then consistently be able to sell the second lot at the higher price. It was as if their was a computer program somewhere watching for daytrading orders comming through and then market manipulation after to "punish" the daytrader for having sold a big lot. One time I was able to parlay the price increase up the price scale by selling the second lot which led to another immediate price increase into which I then sold the third lot.
We know that the MMs that all make up the NASDAQ can and do trade against daytraders.........but do we have to be on the lookout for our own broker's MM tradin against us? I realize that I'm really just buying and sellin lots of stock with E-trade especially when using their automatic routing, but it would seem that that shouldn't affect profitability TOO much unless the data stream they provide to me is altered.
I know, from my experience as an IB customer, that ak15's information is totally false.