Should I route trades through SMART on IB for fastest execution?

C

catmango

I noticed that it always takes ~15-30sec to get confirmation from my IB TWS when I buy or sell individual stocks routing through SMART. That seems pretty slow, especially considering that every review I've read on IB praised its lightning fast execution (Scottrade, by contrast, often filled immediately). I'm a swingtrader, and I'd imagine that the daytraders out there have much more stringent execution speed requirements than me, but I need fast execution because I always do my trades at the end of the day.

Am I routing it properly, or is there an ECN that's much faster and reliable? Any nuggets of wisdom would be greatly appreciated.
 
When I place limit orders for NYSE stocks at the market price (i.e. bid when selling and ask when buying), I usually receive an execution report in well under 1 second. The exception is when the order gets routed to NYSE and the specialist is just in the process of moving the posted price.
 
You should be more specific. Are you placing orders on the bid or lifting the offer? If lifting the offer and your orders are taking that
long, something is probably wrong with your connection.

Also, what size of order are you submitting? Odd lots for example must be marketable on the NYSE. Specialists also might take your order if splitting the book and hold onto it for 15 or so seconds before giving you a fill and possibly a better execution price.

When you hit xmit, how fast is it till you see the order code turn green? If it is immediate, then the issue is with the exchange. If not, then your connection/setup needs to be looked at.
 
Quote from def:

You should be more specific. Are you placing orders on the bid or lifting the offer? If lifting the offer and your orders are taking that
long, something is probably wrong with your connection.

Also, what size of order are you submitting? Odd lots for example must be marketable on the NYSE. Specialists also might take your order if splitting the book and hold onto it for 15 or so seconds before giving you a fill and possibly a better execution price.
More...
I placed a sell order of 935 shares of SGR at market with one minute left in the trading session. I routed it through SMART, which passed it through to NYSE. It sat pending on my TWS for a good 20 sec before I finally received confirmation.

When you hit xmit, how fast is it till you see the order code turn green? If it is immediate, then the issue is with the exchange. If not, then your connection/setup needs to be looked at.
More...
I'm using an NT 4.0 computer with a DSL connection. I'll check on my next trade to see how fast the order code turns green and post my results.
 
your fill isn't unusual for the NYSE. The order was most likely represented at the exchange within a couple hundred milliseconds. However, the specialist can take his time with an execution - especially over the last minute of trading. When an ECN or TMBR have better or equal prices to the NBBO, you'll get an instant fill.
 
Quote from rolegario:


I placed a sell order of 935 shares of SGR at market with one minute left in the trading session..
More...

You're not going to get as fast a fill on a 1) odd lot, and 2) market order on a listed stock. That's true for the entire day session, and even more so going into the close, or if the price is really moving, or if the specialist is packaging a big order, etc. etc.

To test, try buying 100 at the ask (or sell the bid) when there's some size there. Your fill should be almost instantaneous 95% of the time.
 
Quote from rolegario:


I placed a sell order of 935 shares of SGR at market with one minute left in the trading session..
More...

You're not going to get as fast a fill on a 1) odd lot, and 2) market order on a listed stock. That's true for the entire day session, and even more so going into the close, or if the price is really moving, or if the specialist is packaging a big order, etc. etc.

To test, try buying 100 at the offer when there's some size there. Your fill should be almost instantaneous 95% of the time.
 
Quote from AmbushHillbilly:

To test, try buying 100 at the offer when there's some size there. Your fill should be almost instantaneous 95% of the time.
More...
I understand the issue with odd lots, but are you saying that putting a limit order to sell at the bid should execute faster than if I were to put a market order to sell?
 
Quote from def:

your fill isn't unusual for the NYSE. The order was most likely represented at the exchange within a couple hundred milliseconds. However, the specialist can take his time with an execution - especially over the last minute of trading. When an ECN or TMBR have better or equal prices to the NBBO, you'll get an instant fill.
More...
Are you saying then that if a specialist receives my market sell order, then I can assume that it will be reliably filled at or above the bid when they received it?

Thanks again to all for the responses!
 
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