New IB Customer Agreement

W

Wonderduck

So is it just me, or does the new IB customer agreement say that it's fine for them to give our orders and order flow information to use in proprietary trading against us?
 
someone must have been inspired by Mark Douglas' wonderful book.

piggyback the winners and take the other side of the consistent losers?

'an extra 10 cents' a trade playing the odds on 200k order flow a day and a nifty pattern recognition book making program makes for happy bucketing.

I too would like to see the new fine print not that it would affect my relationship with them.
 
Stop the BS before it starts. Read the order routing stats submitted to the exchange on the web site. IB clearly states that it doesn't front run or do anything to your order flow other than attempt to get the best available price. You orders go direct to the market place. Where they get routed is the only decision that needs to be made.

The agreement has to do with the TMBR route which will route an order to TMBR for stocks if it can better or equal the NBBO. In addition, option orders will go to TMBR as well if they are a specialist or primary market maket in a given class and can equal or better the NBBO.

I trade on the prop side and I know for a fact that we receive no benefit or knowledge from customer flow.
 
New agreement mentions a "universal account" of securities, options and futures. Don't see anything on the website, since when is this type of account available? Anybody have one?
 
For those who asked -- this was the text to which I was referring:

9. Authorization For Customer Trades to Be Executed Against IB, IB Customer or IB Affiliate Orders: Subject to applicable laws and the constitutions, rules, and regulations of the exchanges or markets on which such transactions occur, Customer has no objection if orders for Customer's accounts are traded with orders for: (i) other IB customers, or (ii) the proprietary accounts of IB or IB's affiliates. Customer authorizes IB, its affiliates, or their customers, to act as buyers with respect to orders given by Customer to IB to sell for Customer's accounts, or as sellers with respect to orders given by Customer to IB to buy for Customer's accounts. This consent is and may be revoked at any time on written notice to "Interactive Brokers - Attn: Compliance Department" via registered mail. Such revocation shall become effective ten (10) days after receipt by IB's Compliance Department. See also Addendum 1 (Order Routing and Payment for Order Flow Disclosure).

10. Proprietary Trading - Display of Customer Orders: Subject to applicable laws and the constitutions, rules, and regulations of relevant exchanges or markets:

A. Customer authorizes IB to engage in proprietary trading, and to execute the proprietary trades of its affiliates, even though IB may simultaneously hold unexecuted Customer orders for the same products which could be executed at the same price;


B. Customer authorizes IB to disclose Customer orders to others, including IB's affiliates and customers; to disseminate quotes; and to facilitate the execution of such orders.
More...


Def,

I'm not trying to start the flow of bullshit.

My read:
** 10.A., above: "We trade stuff too, in competition with you." I don't have any beef with this.

** 10.B.: This might just mean that we're going to put your order in the quote when appropriate, but could mean that we'll provide additional flow information and statistics to our own traders.
 
Can someone explain the jist of what this new agreement actually means? Like a short summation from someone who actually had time to read it or maybe someone who had a lawyer examine it? Same commissions? Same margin requirements? The basics, at work we would call it the bottom line. Some might call it the skinny.
 
def,

A few of my trade are send by market using best. It never get any price improvement. Close analysis on the tape make me assume TMBR is front running my order. I sold mkt and saw the price execute thru TMBR on the bid price, seconds later another trade went off on the offer price.
 
Originally posted by bouncer
New agreement mentions a "universal account" of securities, options and futures. Don't see anything on the website, since when is this type of account available? Anybody have one?
More...

Last I heard it's being beta tested, and is due out Real Soon Now.
 
Originally posted by crazy_trader
def,

A few of my trade are send by market using best. It never get any price improvement. Close analysis on the tape make me assume TMBR is front running my order. I sold mkt and saw the price execute thru TMBR on the bid price, seconds later another trade went off on the offer price.
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Let me get this straight - you sold at market and rec'd the bid price. You didn't receive under it. What do you expect? I bet you got exactly what you expected. A very fast fill at the market. TMBR doesn't guarantee price improvement but will offer it it can. Seconds later with electronic markets is an eternity. There is no way IB or TMBR could know that someone somewhere was going to take out the offer on the next order. Besides, was TMBR the one on the offer? I doubt it.

If you watch any stock I bet you'll see trades execute on the bid and then seconds later execute on the offer. Is this front running - no - it is the way markets work.
 
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