Orders send over Interactive Brokers do not appear in the Orderbook

M

Mirkou

Hello, I am trading Options and have changed to IAB short time ago.

If I put a ask limit in the system which is a little bit lower than the current best ask it does not appear in the orderbook and it is not transferred into the market by interactive brokers.

The problem for me on this behavior is that I cannot get a fill because for the opposite side (the bid side) my order is not visible.

IAB is manipulating the national bid/ask with this behavior of hiding orders, my questions regarding this:
- how can I avoid that IAB hides my offer from the market (I normally use their smart routing and limit orders, I have checked and could not find any settings on this)
 
Mirkou said:
Hello, I am trading Options and have changed to IAB short time ago.

If I put a ask limit in the system which is a little bit lower than the current best ask it does not appear in the orderbook and it is not transferred into the market by interactive brokers.

The problem for me on this behavior is that I cannot get a fill because for the opposite side (the bid side) my order is not visible.

IAB is manipulating the national bid/ask with this behavior of hiding orders, my questions regarding this:
- how can I avoid that IAB hides my offer from the market (I normally use their smart routing and limit orders, I have checked and could not find any settings on this)
More...
How they manipulate the national bid/ask ? They can't.
But they probably have a dark pool or something where your and my orders are met together.
 
Yeah I noticed that too with some trades. Interestingly its usually my losing trades too though I am obviously too small a potato to ever have any market impact from my positions. Yeah probably some kind of dark pool or orders can be sold to some HFT firm.

Another thing I notice is, sometimes when I do limit orders between a stub quoted and very wide bid ask spreaded options, that sometimes I get filled in a crappy price than even the bid/ask immediately after my transaction, even though the bid or ask quotes immediately update to a better price and someone pockets maybe $2-3 absolute. In the past, I would get the better price. Something must have changed.

What I mean is, if say there is a stub quote on an options contract of $1.00 bid and $2.00 ask, and I want to sell, and I put a limit in at $1.5 and it doesn't fill. So I shave off $0.08 to sell at $1.42 and then it gets filled. Well, I would have sold at $1.42 + commissions. But then I'd see immediately on the bid (which is now updated from stub status) to be $1.45. So, there was a willing participant against the position at $1.45 (hidden), but I got the fill at $1.42. In the past, even if I did $1.42, it would have filled and I would have gotten the $1.45 instead (better price). Nowadays, I get exactly what I put the limit on.
 
Georgi90 said:
How they manipulate the national bid/ask ? They can't.
But they probably have a dark pool or something where your and my orders are met together.
More...

They manipulate it. The national bid/ask would be different if they would add my order, for this reason they change/manipulate the national bit/ask in my opinion.
 
butterfacetrader said:
Yeah I noticed that too with some trades. Interestingly its usually my losing trades too though I am obviously too small a potato to ever have any market impact from my positions. Yeah probably some kind of dark pool or orders can be sold to some HFT firm.

Another thing I notice is, sometimes when I do limit orders between a stub quoted and very wide bid ask spreaded options, that sometimes I get filled in a crappy price than even the bid/ask immediately after my transaction, even though the bid or ask quotes immediately update to a better price and someone pockets maybe $2-3 absolute. In the past, I would get the better price. Something must have changed.

What I mean is, if say there is a stub quote on an options contract of $1.00 bid and $2.00 ask, and I want to sell, and I put a limit in at $1.5 and it doesn't fill. So I shave off $0.08 to sell at $1.42 and then it gets filled. Well, I would have sold at $1.42 + commissions. But then I'd see immediately on the bid (which is now updated from stub status) to be $1.45. So, there was a willing participant against the position at $1.45 (hidden), but I got the fill at $1.42. In the past, even if I did $1.42, it would have filled and I would have gotten the $1.45 instead (better price). Nowadays, I get exactly what I put the limit on.
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yes, if your order is not in the orderbook of the exchange noboday can react on it and you can not get the "hidden" opposite orders.

I think this is not correct from IAB, I will read their disclaimers again if they are allowed not to submit your orders and give you worse fills.

This is a money machine for them, especially if you trade a little more.
 
I am not an expert on this, but my observations are if the order is being SMART routed, it will not show up in the orderbook whereas when it displays an exchange for the order, it does show up. I always hover my mouse over the green arrow next to an order to see its status. Working on SMART = it is probing exchanges, pools, etc for a fill, Working on XXX (PHLX, PSE, etc) and I can see it in the NBBO.

Just my two cents, again, not an expert by any stretch.

Edit: And you can always force route it to an exchange (changes commission structure I believe)...
 
oldnemesis said:
https://gdcdyn.interactivebrokers.c...rmSampleView?ad=order_routing_disclosure.html

Sending an order to IAB does not send it directly to an exchange that is available to the NBBO.

Many brokers are conglomerating orders to make your order part of a larger order so that the broker can get money for providing liquidity.

IAB says it doesn't do that.

:-)
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yes, that is the point. If I would trade at one of these forex bug shops I would not be surprised but IAB claims to be a "real broker".

I will read the IAB documents and try this again on Futures Options and make a video out of it and open a complain at the NFA (because they have more harsh punishments than the SEC). IAB had to pay already for some commission and transfer related issues http://www.nfa.futures.org/basicnet/CaseInfo.aspx?entityid=0258600&type=reg .
 
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