If your brokerage is the counterparty to your trades...

[ak15]

An update on my earlier observations:

When Smart is used as the routing choice:

The adding and minusing of a penny on my orders meant to lift the bid and/or offer and instead posting my order as the inside bid or offer after adding or removing a penny is no longer taking place. However it has been replaced with the following:

When I place as order to lift the inside bid or offer, it is now being filled by Ideal (Timber Hill) in almost all instances. In essence TH is taking the opposite side of my trades in these situations. What consequences does it have on my trading?

If I enter a position then the results are not good for obvious reasons.

If I exit a position then I don't care as long as I don't get back later in the same security. If I do re-enter the same security the result is a loss again for obvious reasons.

I'll reiterate that Ideal only takes the opposite side of my trades when I attempt to lift the inside bid or offer. If I add to liquidity by posting as the inside bid or offer then on my order gets posted on Inet for Nasdaq and Nyse for Nyse stocks.

The above can be verified by anybody who is an IB client and trades stocks. If your results are different then please let me know since this would segue into a different ball game.

The alternative is to choose your own routing. It is doable but not very practical under IB's current setup. First you have to choose stocks as the instrument, then opt for "Directed" as the routing option and finally decide on the ultimate destination - Inet, Arca etc. Needless to mention that all these steps entail loss of precious time when you are actively scalping .

 

[ssss]

ak15


An update on my earlier observations:
*********************************

Exist motive -as IBKR is not pure agent of principal
(Romian law)

AMTD(after selling interess in NITE ),OXPS,SWIM (thinkorswim -public noted after merger)

are pure agent*s

Divide your capital in three parts and work only with
pure agent of principal ,which have not proprietary
accounts .

 

[spyderman]

Quote from ak15:

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.

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.




The above is sheer nonsense. They don't give a hoot about your order enough to play "stock market" with it. And why would anyone trade a $165 stock for 12 cents?

 

[ak15]

Quote from spyderman:

Quote from ak15:

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.

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.




The above is sheer nonsense. They don't give a hoot about your order enough to play "stock market" with it. And why would anyone trade a $165 stock for 12 cents?

I speak for myself based on my experiences and perspective culled from such. You can call it nonsense. I'm neither offended nor enthralled by such off the cuff remarks. I've related what actually transpired during my trading spread over a time period.
As I've stated repeatedly on prior occasions, people can derive their own conclusions. Each to his own.

 

[Option Trader]

Quote from ssss:

ak15


An update on my earlier observations:
*********************************

Exist motive -as IBKR is not pure agent of principal
(Romian law)

AMTD(after selling interess in NITE ),OXPS,SWIM (thinkorswim -public noted after merger)

are pure agent*s

Divide your capital in three parts and work only with
pure agent of principal ,which have not proprietary
accounts .

Thank you, as this is valuable information.

 

[Option Trader]

Quote from hottpotat0:

i saw FRONTRUNNING all the time with Scottrade elite but i think with larger orders that i placed scottrade would go contrary by using the options mkt CBOE MM to move a stock against my trade-that is the MM job is to create a market and the specialists job is to make money for what ever stock the are selling/buying for so they aalmost always are contrary to retail-furthermore the specialist/MM gets level Three quotes -only pros get that input-detecting flow direction and intention is how they make so much money-one last thing retail buyer seller is a different color code on level II quote screen so one can tell how involved retail is in a stock and base major strategies on this info AGAINST RETAIL in order to get our money-why else would a MM be able to short sell a stock to infinity when no one that owns the stock is wiling to sell just to create a market -where the MM make money off the spread???
in reality if there are no offers on the ask side a stock should move up in price rapidly until someone wants to sellor vice versa on the bid side -specialist creates false buying pressure or selling pressure just to take money out of the market for firm-also kick back to company o wners from routing orders a certain way!
ITS ALL ROBBERY
all should know their dirty tricks!!

Thank you much. Does anyone disagree?

 

[Option Trader]

Quote from def:

show the proof. i highly doubt that if it is a limit order to purchase stock. If a sale, I'd understand as you'd be getting price improvement.

We've got a ton of IB clients on this board and suspect we'd be hearing from others if this was occurring. I'm also making myself available to review your audit trail.

Is there something an IB client must do to qualify for price improvement for stock trading? I don't seem to be getting this with IB.

 

[urep]

Quote from def:

[{B]ak15, FALSE FALSE FALSE... No truth to your comments.

Timber does NOT repeat NOT see IB orders. }


What actual proof can you offer to support this statement? Are there reports from the SEC, auditors, compliance inspectors? Every broker claims they don't use customer information, that there is a wall between there trading desk and brokerage operations, but if one ask questions for evidence to back up such statements, it is never produced. And I mean independent verification and not some disclaimer statement that no one can verify. You ask for proof for Option Trader's claim so why not offer some proof of your own?

 

[def]

Quote from urep:

Quote from def:

[{B]ak15, FALSE FALSE FALSE... No truth to your comments.

Timber does NOT repeat NOT see IB orders. }


What actual proof can you offer to support this statement? Are there reports from the SEC, auditors, compliance inspectors? Every broker claims they don't use customer information, that there is a wall between there trading desk and brokerage operations, but if one ask questions for evidence to back up such statements, it is never produced. And I mean independent verification and not some disclaimer statement that no one can verify. You ask for proof for Option Trader's claim so why not offer some proof of your own?

of your 5 posts you hit on the same subject 2 years ago and rec'd the following response.

02-16-06 01:00 AM
http://www.elitetrader.com/vb/showthread.php?s=&threadid=60032&perpage=6&pagenumber=25

Quote from urep:

OK it seems either Def has not seen this or doesn't wish to reply.
Anyone else from Interactive Brokers wish to reply?

Timber Hill and IB act at arm's length. The only preferential relationship is in terms of US options/US stock routing where IB can route to TH as specialist when TH is on the NBBO. This is disclosed on the website at:
http://www.interactivebrokers.com/e...gDisclosure.php
Note that IB makes the routing decision without any prior notification to TH. TH is unaware of any order prior to the order hitting the open market at the exchange. In no case is the client order disadvantaged.

Besides numerous members of IBG stating the facts our chairman said the same thing in the last earnings conference call.

We actually have had best execution audits over the years including a recent independent audit showing 14.85% price improvement vs the industry average of 0.57% for options and still get people like yourself who come along claim we could all be lying. I'm not sure what else to add. If you can't take us at our word and think that those millisecond fills clients receive are being manipulated, send me a PM, I've got a bridge in Brooklyn to sell to you.

 

[urep]

Def Wrote "We actually have had best execution audits "

You misunderstand me.
What I'm asking is who audits your software or audits your interaction with TH to ensure that the so called Chinese Wall is actually there? Remember the Brokerage Industry used to always say that their research/analyst department and trading desk had this "Chinese Wall" as well. So your answer has historical precedent.



You're a private company and you have proprietary software that no one else can look at, so you can say anything you want without any independent verification.


So is there any independent verification source that verifies TH and IB do not share any customer data or trading data (i.e. not a self referential IB statement or the IB Chairman's statement)??