Order execution problem

T

Toonces

Yesterday I had a trade go wrong, and I talked to a brokerage rep. Can someone verify if what they told me is true? Here are the details.

I attempted to sell 500 shares at 24.00. The entire 500 share order goes to a market maker who is on the inside bidding 200 shares at 24.14. He fills those 200 shares, and the remaining 300 shares are canceled immediately because he is only bidding 200. I don't get filled on the remaining 300 shares, even though there are bidders willing to pay 24.00 or higher.

Is this the way it works? My broker told me it has nothing to do with their execution system; the market maker will immediately cancel your entire order after he fills you, even if it just 100 shares and your order is significantly higher.
 
Quote from Toonces:

Yesterday I had a trade go wrong, and I talked to a brokerage rep. Can someone verify if what they told me is true? Here are the details.

I attempted to sell 500 shares at 24.00. The entire 500 share order goes to a market maker who is on the inside bidding 200 shares at 24.14. He fills those 200 shares, and the remaining 300 shares are canceled immediately because he is only bidding 200. I don't get filled on the remaining 300 shares, even though there are bidders willing to pay 24.00 or higher.

Is this the way it works? My broker told me it has nothing to do with their execution system; the market maker will immediately cancel your entire order after he fills you, even if it just 100 shares and your order is significantly higher.
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It depends how you sent that order. If you sent it directly to that MM, then yes, the order went fine. Orders sent directly to supersoes are IOC, immediate or cancel.

If you sent the order using their "smart" routing, then it sounds like a flaw in your broker's routing logic. It sent all 500 shares to that MM, who filled you for 200 and cancelled the rest. This is normal. Your broker should have then resent the remaining 300 shares to the rest of the market.
 
Quote from GTC:

Toonces, Who is that broker?
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Actually it's CyberTrader. I've been alternating between Cyber and IB for a while. It has seemed to me that Cyber has given me inferior fills, but this is the first time I have actually gotten around to reviewing a questionable order routing in detail.

It seems to me that IB will instantaneously sweep any orders up to your limit price. I'm going to trade small lots only with Cyber for a while to test them, but it doesn't look good so far.
 
Quote from Toonces:

the market maker will immediately cancel your entire order after he fills you, even if it just 100 shares and your order is significantly higher.
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Quote from Htrader:

It depends how you sent that order. If you sent it directly to that MM, then yes, the order went fine. Orders sent directly to supersoes are IOC, immediate or cancel.
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Htrader, I'm confused now. If you route to an MM, is it always supersoes? Is this something particular to Direct Access Trading?

Who holds the limit order on their books then? I've always thought it was the MM that was holding the limit order and responsible for filling the order.
 
Quote from spreadgod:

Htrader, I'm confused now. If you route to an MM, is it always supersoes? Is this something particular to Direct Access Trading?

Who holds the limit order on their books then? I've always thought it was the MM that was holding the limit order and responsible for filling the order.
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I'm only talking about direct access platforms. MM show their quotes on the supersoes system.

This does not apply if you are using a non-direct access broker like etrade, ameritrade, or brownco.
 
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