"smart routing".... IB vs. CYBERTRADER

Quote from Stecchino:

I've just signed up for an account with IB and I'm using the TWS "Live" Demo...when I choose "smart" for trades, it shows only (ISLAND and ARCA and for New York stocks , it shows NYSE as well). Does this mean that IB will only get the best price from one of these 3 locations? What about other ECN's, etc.?
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The demo is missing alot of the features of the real version.

With nasdaq stocks you get smart, arca, brut, btrade, island, and supersoes.

For nyse stocks you get smart, arca, brut, caes, island, and nyse.
 
Quote from Stecchino:

Does this mean that IB will only get the best price from one of these 3 locations? What about other ECN's, etc.?
More...


For a market order yes... but more locations. Limit orders are more complicated because they can stay alive for hours.

As a generalization, for listed stocks the biggest liquidity pool is on the NYSE... especially lower volume stocks < 200,000/day... for which there is near zero liquidity on ECNs.

So IB Smart will make sure your Limit Order stays the max amount of time in NYSE Limit Order Book... without triggering 5 minute Specialist charges. So your order moves around... and can be NYSE for 4.5 minutes intervals or if NBBO. It's works well. The fills are good. But you might miss 10% of fills entirely. It's very debatable how much money that actually costs you...

IB Smart is probably the best you can do for taking money away from the NYSE Specialist Evil Monopoly.

rm+

:cool: :cool: :cool:
 
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