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

a more important question would be

how many market makers or hedge funds or investment banks
or broker dealers etc are privy to your positions and excess liquidity ?

seems like all the time there are stories of funds being squeezed
by other funds

so why can't this also happen to the retail customer ?
 
def,

I'm fairly certain I know what ak15 is referring to, regarding order routing. As strange as it may sound, this is an issue that I've confirmed with your developers, and the exchange--the repricing of orders when using SMART. This is related to stocks only, as far as I know of.

The issue tracks back to SMART/ISLD, if the SMART order gets routed to ISLD, say for 1000sh., and 300shs of it is marketable on ISLD, it'll execute those 300sh, but if that ISLD order would lock against another market, ISLD reprices it backwards away from the NBBO.
This is to be compliant with their NMS reg duties, as your ISLD orders are "do not route out". Here's the rub.....if SMART doesn't re-route to the locking exchange fast enough, then it seems to get stuck on ISLD. The order does not reprice, back to it's original LMT price, once ISLD has modified it, for compliance.

There's a bit more related to how ISLD handles these orders, but it is a serious issue that does impact SMART indirectly.

Personally, it really bothers me how ISLD handles these orders, it's a real issue for SMART, and is certainly costly, as orders are not as the customer intends. This is not a Timber Hill or IB issue, really, as ak15 eluded to, but is in fact an ISLD one, that impacts SMART.
 
Quote from MR.NBBO:

def,

I'm fairly certain I know what ak15 is referring to, regarding order routing. As strange as it may sound, this is an issue that I've confirmed with your developers, and the exchange--the repricing of orders when using SMART.

The issue tracks back to SMART/ISLD, if the SMART order gets routed to ISLD, say for 1000sh., and 300shs of it is marketable on ISLD, it'll execute those 300sh, but if that ISLD order would lock against another market, ISLD reprices it backwards away from the NBBO.
This is to be compliant with their NMS reg duties, as your ISLD orders are "do not route out". Here's the rub.....if SMART doesn't re-route to the locking exchange fast enough, then it seems to get stuck on ISLD. The order does not reprice, back to it's original LMT price, once ISLD has modified it, for compliance.

There's a bit more related to how ISLD handles these orders, but it is a serious issue that does impact SMART indirectly.

Personally, it really bothers me how ISLD handles these orders, it's a real issue for SMART, and is certainly costly, as orders are not as the customer intends. This is not a Timber Hill or IB issue, really, as ak15 eluded to, but is in fact an ISLD one, that impacts SMART.
More...

The issue here is very basic and simple. Nothing complicated about it at all. Allow IB clients the choice to choose Smart as the routing vehicle but to exclude Ideal as the venue where their order is filled. I'll use an example again to illustrate my point. I want to buy 1000 shares of ABCD. I would like to lift the inside offer where I see 1500 shares being offered on Arca. I choose Smart as the routing vehicle. I find that instead of lifting the 1000 shares from Arca, my order is filled by Ideal to whom Smart routed the order to as opposed to filling the order on Arca where there were 1,500 shares available to be filled. Needless to say, Ideal was not visible on the inside offer but my order was routed to and filled by Ideal when I chose Smart as the routing vehicle.
All I am requesting is allow my order to be filled by Arca(Which is displaying 1,500 shares available on the inside offer) in this example instead of being filled by Ideal when I use Smart as the routing instrument.
If there is a chinese wall, then it shouldn't matter to IB where I get filled assuming there is no conflict of interest.
The logical next question would be : You're getting filled. What do you care who fills your order? I do care. If I buy the shares offered on Arca, I am on relatively safer territory as opposed to Ideal who knows where the order is coming from. This is assuming there is no chinese wall. If there is a Chinese wall then it shouldn't matter to IB if I get my order filled on Arca since there is no conflict of interest.
 
I must have mis-read your post then, ak15, sorry.


Quote from ak15:

You don't get good fills at IB. Because their commissions are low they are interested in earning rebates on clients orders. I am talking stocks here and my remarks are confined to this instrument. If you are an active scalper at IB you will notice that most often you will get a price improvement of a penny on your orders in cases where you decide to lift the bid or offer. IB instead of lifting the bid or offer, adds a penny to your order and posts your order as the inside bid or offer thereby resulting in the price improvement of a penny on your trade when filled and more importantly from IB's point of view earns rebates for adding liquidity.
From a trader's point of view this could be extremely dangerous. Instead of getting an instant fill by deciding to take out the inside bid or offer, a penny is added to your order before being posted as the inside bid or offer leading to a situation where the price could spiral away leaving your order unfilled.
This is the case when routed through smart. However even if you decide to self route your orders you will find that it does not help because IB keeps adding a penny before posting in order to add to liquidity and earn itself rebates.
Keep a close eye on Timber Hill their MM particularly when you place large orders. He will keep posting large size in the opposite direction of your trade. However, when he reaches the inside bid or ask he will back away to a few levels down. He will keep repeating this process over and over again thereby sending a message to other MMs.
More...
 
Quote from MR.NBBO:

I must have mis-read your post then, ak15, sorry.
More...

If you're referring to this particular post you didn't mis-read it MR NBBO. If you followed this thread from the beginning I've chronicled what I experienced trading at this firm and the changes that I encountered over a period of time.
Initially this is what was taking place. Then things started changing and I outlined the changes. My last post was tied to these changes.
I can only speak for myself and my trade transactions. In a nutshell, when I started trading, I found that when I placed orders to remove liquidity, a penny would be added or removed as the case maybe and my order would accordingly end up providing liquidity - involuntarily and not intended on my part. I brought up this issue here and what followed was what I've now been alluding to - Getting filled by Ideal when I attempt to remove liquidity notwithstanding the fact that there were ample shares available at the time on ECNs like Arca, Inet etc.
 
I have some constructive criticisms of IB, which I wish I could discuss in this thread, but my fear is that by doing so, I would be assisting people who are unfairly and irresponsibly making false accusations against IB.
 
About the hidden liquidity issue, in the wake of some of the observations made, I increased my day trading on Thinkorswim today. My experience was [aside from the issue of price improvement coming from hidden liquidity], I was able to unload my shares much easier. E.g., if the bid shows 100 shares on NYSE, about 85% of the time I was able to unload 200 shares at the bid instead. In addition, when trying to sell between the bid & ask on IB, the bid/ask ran away from me on IB, but with TOS it stayed much more steady.

I would like to know if others have experienced the same, because it's difficult to make conclusions from one day of trading.
 
Quote from jimrockford:

I have some constructive criticisms of IB, which I wish I could discuss in this thread, but my fear is that by doing so, I would be assisting people who are unfairly and irresponsibly making false accusations against IB.
More...

Rockfish, unless you have been a General Securities Principal for a US broker-dealer (I was for 7 years)...
You have no idea what really goes on...
And are just shilling for a $10 billion company.

Only ak15 is posting in goodwill... and is very close to the truth.
 
Quote from DeeDeeTwo:

Rockfish, unless you have been a General Securities Principal for a US broker-dealer (I was for 7 years)...
You have no idea what really goes on...
And are just shilling for a $10 billion company.

Only ak15 is posting in goodwill... and is very close to the truth.
More...

DeeDeeTwo,

I'm sure you are very knowledgeable about order routing issues, but your accusation that I am shilling for IB is totally false. I have, for example, recently criticized IB's order routing in other threads, in ways which a shill would never have done. I think that your lack of respect for opposing viewpoints says more about your own arrogance and lack of people skills than it does about the level of knowledge of those whom you dismiss.

And believe it or not, there ARE ways to know a thing or two about what is going on, even for a person who was NOT a General Securities Principal. It is, indeed, possible for somebody other than yourself to know a thing or two.
 
Quote from DeeDeeTwo:

Rockfish, unless you have been a General Securities Principal for a US broker-dealer (I was for 7 years)...
You have no idea what really goes on...
And are just shilling for a $10 billion company.

Only ak15 is posting in goodwill... and is very close to the truth.
More...
Is it a based on a hunch (based on your experience with your BD) that the same could apply by IB? Or have you seen with your own eyes? What items are you referring to?
 
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