Retail routing to IEX exchange

[freedinner]

Not according to Thomas Peterffy, Chairman and CEO of Interactive Brokers

"At this point, IEX is a dark pool that will forward enter market sweep orders, so that they get to their destinations exactly at the same time. We made IEX available, but believe that our customers remain to be better served by our smart router, which not includes IEX also."

http://seekingalpha.com/article/214...-2014-results-earnings-call-transcript?page=3

just wanted to post that. however i think he said "inter market sweep" instead of "enter" and "now includes IEX" instead of "not includes".

 

[just21]

I have listened to the conference call at about 11m 50 seconds and have corrected the seeking alpha transcript.

https://investors.interactivebrokers.com/ir/main.php

"At this point, IEX is a dark pool that will forward inter market sweep orders, so that they get to their destinations exactly at the same time. We made IEX available, but believe that our customers remain to be better served by our smart router, which now includes IEX also."

Thomas Peterffy

 

[rwk]

I have been struggling to get my brain around this topic of market microstructure. I recently read Flash Boys and believe the author has made a convincing case that IEX is beneficial to traders. I would like to provide at least moral support.

I don't even know if HFT predation is affecting my PnL. I had been assuming that my "mouse nuts" trading was too insignificant to be a factor. But in some of the issues I trade, 100 shares is huge.

The most important message I got from Flash Boys was that the problem is not high frequency trading per se, but a screwed up market. Painting HFT as "evil" makes for good storytelling, but it may not be the best public policy. As Lewis pointed out in his book, the problems in the market today are the direct result of solutions to previous problems. I worry about how the solution to HFT predation will screw things up even worse. Transaction tax, anyone?

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[just21]

For small orders the market is more liquid and has tighter spreads than any time in history. This is a problem for big orders from mutual funds so does affect a lot of smaller investors indirectly.

 

[jtrader33]

For small orders the market is more liquid and has tighter spreads than any time in history. This is a problem for big orders from mutual funds so does affect a lot of smaller investors indirectly.

Honest question, what defines a small order these days? 100 shares or less?

 

[just21]

Ib smart router breaks my orders down into 100's when I try to buy 1000's.

 

[jtrader33]

Thanks for the reply def. I believe that means they're not eligible for cost plus and fall under a flat rate of $.013/share:

https://www.interactivebrokers.com/en/index.php?f=commission&p=stocks2

My average all-in using SMART API orders is ~.0034/share, so we're talking roughly 4x the cost to send orders to IEX. I'm appreciative of the fact that you guys have added them, but without the orders being included in the cost plus structure, using them isn't a realistic option. Would IB consider adding these to the cost plus structure? I know you've done this in the past in similar situations (e.g. native pegged orders).

def / IBSoft- any chance of this happening?

 

[jtrader33]

For anyone interested, Tradestation is offering unbundled pricing with no surcharge to direct route orders to IEX (or anywhere else). Hopefully, IB follows suit.

 

[dloyer]

Yes, TS will allow an order to be routed to IEX, but only if it is marked "FOK" (Fill or kill)

TS does not offer a way to have a order rest on IEX or allow IEX to route it someplace else.

So, while TS can claim the are connected, they are not connected in a way that is useful to most users.

 

[jtrader33]

Yes, TS will allow an order to be routed to IEX, but only if it is marked "FOK" (Fill or kill)

TS does not offer a way to have a order rest on IEX or allow IEX to route it someplace else.

So, while TS can claim the are connected, they are not connected in a way that is useful to most users.

Spoke with TS about this...that was Stage 1 of the implementation. They are in the process of adding all available order durations/types to IEX.