I know from the posts, that several use ISLD, and apparently quite regularily. IMO, almost always the prices shown on ISLD (and other ECNs) are not the best as compared to the MMs. I believe that Dustin said (or implied) that this wasn't a real concern, as the end result was that he could get a real buy and/or sell price. Is this normally true (in other words, try to avoid the MMs by use of the ECNs---especially ISLD? Like some comments on this---especially in regard toward short sales.
Users of ISLD, a question.
- Thread starter Gene
- Start date
Regarding island, on a fast moving stock, prices on island are almost always "worse" than the ones quoted by the MMs, but the island quotes represent the true market price. Normally you won't be able to get any executions on the MMs quotes if island is signifigantly different from it. The problem is the MMs have a certain amount of time before they need to refresh their quotes so oftentimes in a fast moving stock they will simply sit on it with stale quotes that no one can get an execution at.
Regarding short sales, island has a nice feature in that on an uptick, you can short a stock at ANY price. This works well when you have a stock that is just plummeting and you want to short. Well, you get one small uptick and this allows you to short the stock at any level on island, it doesn't have to be at the uptick price.
Regarding short sales, island has a nice feature in that on an uptick, you can short a stock at ANY price. This works well when you have a stock that is just plummeting and you want to short. Well, you get one small uptick and this allows you to short the stock at any level on island, it doesn't have to be at the uptick price.
I use ISLD almost exclusively in my trading, and I have yet to have any problems. I also should mention that I trade extremely liquid stocks (i.e. JNPR, EMLX, CHKP), so more often than not ISLD is at the best bid or ask, and if not there's one usually very close. If you use a direct access broker that offers access to 3 or more ECN's, you should be able to find bids and offers that are at or near the inside without having to deal with MM's, unless of course you're trading an illiquid stock, in which case you may have no choice.
I use island mainly. It is the cheapest (I do a lot of shares). probably arca second. Arca is like an snet, but i can catch ecn's also. I find that inca lags the true market the most, but you have to choose inca to get filled. Arca is slow to do it. But inca is way too expensive to use all the time. 1.5c a share i think.
Baron
ET Founder
zboy summed up the ISLD question when he said, "I trade extremely liquid stocks".
The frequency that you see ISLD at the inside bid or ask will be dependent on the liquidity of the stock you are playing. High-volume stocks with many market participants will produce far more ISLD bids and offers at the inside market than low volume stocks will. Therefore, if you want to use an ECN like ISLD as your primary execution vehicle, you must choose liquid stocks that can accomodate that style of trading.
The frequency that you see ISLD at the inside bid or ask will be dependent on the liquidity of the stock you are playing. High-volume stocks with many market participants will produce far more ISLD bids and offers at the inside market than low volume stocks will. Therefore, if you want to use an ECN like ISLD as your primary execution vehicle, you must choose liquid stocks that can accomodate that style of trading.