Unfair Timber Hill charge for IB-unbundled pricing

Quote from FredBloggs:

ib - those are good answers.

it does read that ib is willing to take the other side of all cutomer orders though - especially when the probability of ib filling orders is almost 1.0

is the timber hill ecn available to non ib customers? i got the impression it wasnt. if not, why not?

there seems to be a lot of extra machine cycles in deciding where to route. does this latency itself cause some slippage on the odd occasion? i would have thought this would have been more relevant to those using automated agent to trade. (or am i being pedantic on this last point - i dont use automated systems to trade, but do know a bit about computers)
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IB does not take the other side, it is one of the liquidity providers (either TMBR or one in the IDEAL pool). The fact that the probability is 1.0 does not mean that they take all orders; the probability is conditional on the order being executable against them.

TMBR is available to non-IB customers through its quotes on NASDAQ and the ECNs where it trades. The benefits that IB customers get are:
- TMBR is at NBBO for IB customers more often than for non-IB customers
- when TMBR is at NBBO for non-IB customers, some of that time it is at better than NBBO price for IB customers
This is largely possible because the quotes TMBR shows to IB don't suffer any latency.

The "few" extra cycles it takes to make a routing decision have negligible effect on the slippage.

I am now desubscribing from this thread.
 
Quote from IBsoft:

IB does not take the other side, it is one of the liquidity providers (either TMBR or one in the IDEAL pool). The fact that the probability is 1.0 does not mean that they take all orders; the probability is conditional on the order being executable against them.

TMBR is available to non-IB customers through its quotes on NASDAQ and the ECNs where it trades. The benefits that IB customers get are:
- TMBR is at NBBO for IB customers more often than for non-IB customers
- when TMBR is at NBBO for non-IB customers, some of that time it is at better than NBBO price for IB customers
This is largely possible because the quotes TMBR shows to IB don't suffer any latency.

The "few" extra cycles it takes to make a routing decision have negligible effect on the slippage.

I am now desubscribing from this thread.
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thanks for the reply. sorry to see you are desubscribing from the thread - im sure others will have constructive questions for you later in the day....

sorry for any confusion when i said 'ib take the other side of customers trades' i thought timber hill was owned by ib. my mistake. sorry.
 
There seems to be an unhealthy obsession with who is on the other side of your trades.

It's none of your business.

What does 'trading against you' mean?

You enter a trade at a price or market, and you get filled or you don't.

Who cares who the other side is?

This harkens back to the notion that your performance is being 'hampered' by who is on the other side of the trade.

I divine this because if you were happy with Timber being on the other side, you would not be constantly harping on it.

Get real.
 
Fredbloggs, IB does own Timber Hill.

IBSoft seems to be explaining that IB routes to the best price, taking into account not only the fees and the displayed quotes of each market center, but also the average slippage and fill probability resulting from each routing choice. So it is not automatically unfair to route to Timber Hill, when Timber Hill displays the same quote as another market center, while charging a higher fee than the other market center. Timber Hill's better fill probability, and/or less average slippage, might outweigh the difference in fees.

I'm disappointed that IBSoft de-subscribed from this thread. I wanted to ask him about Timber Hill price improvement. Does Timber Hill price improvement involve Timber Hill executing at a better price than the Timber Hill quote displayed to IB's order routing algorithm? If so, is the average Timber Hill price improvement bigger or smaller than the price improvement provided by routing to ECNs? Does anybody know the answers to these questions?
 
Quote from IBsoft:

First a few facts:
1) The website does not clearly explain the different charges. A more precise version would say:
- TMBR or IDEAL AutoEx ...
- NYSE Direct at NBBO (i.e. electronic NYSE execution) 0.001
- NYSE non Direct at NBBO (i.e. manual execution) 0.002

2) The charges are not in effect yet, at present you don't pay for listed executions on TMBR and IDEAL.
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IBsoft may not read this thread again, but thanks. I would say Timber Hill charge is fair based on your explanation.

Your #2 answer, that the charge is not in effect, is wrong. I have more than several proofs showing 0.002 charge.
Whenever NYSE stocks are executed against TMBR I am paying additional 0.002 charge, which I better understand why now.
 
Quote from ggoom:

IBsoft may not read this thread again, but thanks. I would say Timber Hill charge is fair based on your explanation.

Your #2 answer, that the charge is not in effect, is wrong. I have more than several proofs showing 0.002 charge.
Whenever NYSE stocks are executed against TMBR I am paying additional 0.002 charge, which I better understand why now.
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Would you still get the nbbo without timber hill? if so, then i would say the extra bells and whistles are not worth the extra cost - especially if you are doing size and scalping.

im kind of neutral anyway because i dont use ib.

good trading.
 
jimrockford,
I had the same idea as you as to "what does IBsoft mean by price improvement". I think he simply means that timber stands by the nbbo and fills it when an ecn might be taken and gone, thereby providing price improvement since you would have to go to another level to find another ecn for a fill. I do not for one minute think that he meant that timber shaves the market to provide better prices.
 
In the past, it's meant what everyone means by price improvement - "better than the NBBO". If anyone here gets a lot of TMBR executions, it would helpful to publish them so we can work with real facts.
 
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