What is more important than cheap commission?
- Thread starter alain
- Start date
I just had this posted in another post.
Being able to get out of all your positions in seconds in case of hardware failure, a bad internet connection, brokerage software going down and so forth.
Read all of the comments on the broker section on IB and notice quite a few say it's impossbile to reach them on the phone.
So what do you do if you own 5 positions of 5000 shares and the electricty goes out and Greenspan comes out saying something that will hurt your positions????
I pick up the phone call Risk Management by hitting the * key at my firm and say exit everything market now.
Try that @ IB....
Robert
Being able to get out of all your positions in seconds in case of hardware failure, a bad internet connection, brokerage software going down and so forth.
Read all of the comments on the broker section on IB and notice quite a few say it's impossbile to reach them on the phone.
So what do you do if you own 5 positions of 5000 shares and the electricty goes out and Greenspan comes out saying something that will hurt your positions????
I pick up the phone call Risk Management by hitting the * key at my firm and say exit everything market now.
Try that @ IB....
Robert
Alain,
I think anyone looking for a broker should first decide what is important to them and then make a short list of brokers you would like to research in further detail and then contact them with questions that are important to you. Htrader and rtharp both have very important points concerning quality of execution, using a stable platform, and having a broker you feel confident that if something happens that you can't get that trade off online you can contact them by other means and close out of positions. Living in Switzerland, you may or may not find value in a broker that is accessible in some sort of live chat which could cut down on phone costs for basic questions you have during the trading day. Also living abroad email correspondence could be a valuable form of communication, I know some people will open a conversation with Terra Nova by email to see the response time. Other things you may consider is education on trading and how important this may be to you? If that is something you value, then what opportunities does the broker offer?
Good luck finding a new broker Alain, keep Terra Nova Online in mind in your search. Check out, www.terranovaonline.com for more info.
Regards,
Michael Garvey
Client Services
Terra Nova Online
I think anyone looking for a broker should first decide what is important to them and then make a short list of brokers you would like to research in further detail and then contact them with questions that are important to you. Htrader and rtharp both have very important points concerning quality of execution, using a stable platform, and having a broker you feel confident that if something happens that you can't get that trade off online you can contact them by other means and close out of positions. Living in Switzerland, you may or may not find value in a broker that is accessible in some sort of live chat which could cut down on phone costs for basic questions you have during the trading day. Also living abroad email correspondence could be a valuable form of communication, I know some people will open a conversation with Terra Nova by email to see the response time. Other things you may consider is education on trading and how important this may be to you? If that is something you value, then what opportunities does the broker offer?
Good luck finding a new broker Alain, keep Terra Nova Online in mind in your search. Check out, www.terranovaonline.com for more info.
Regards,
Michael Garvey
Client Services
Terra Nova Online
Robert said it right. Both Commission & Service are important. Why would any firm offer .005 per 1000 share rates(above 1000 shares), unless they could monitor or trade against the order flow. There are no free rides on Wall Street. Our top trader in 1998 made a seven figure income (and paid .03 per share), but he had a direct connection on ROX software to the NITE crossing network , he was a great trader and trading conditions were alot better. So the execution was worth the extra commission, at that time.
Pro firms might be a better deal , if you need the extra service ,
training & support. You have to decide that for yourself.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
Pro firms might be a better deal , if you need the extra service ,
training & support. You have to decide that for yourself.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
This is a question dear to my heart, and I will tell you my experience (I have posted it before, but here it is again.)
I am with IB for about two years. I trade 98% listed and 2% NASDAQ.
On NASDAQ, I wouldn't hesitate to use IB. The executions are lighting fast as anywhere I have seen. In addition, if I am the best bid/offer, it will be displayed in the L2.
_HOWEVER_, on Listed, maybe one in a thirty times do I see my bid/offer displayed when my bid/offer is the best bid/offer (BTW, I know of the uptick rule, which could cause your offer not to be displayed in those cases.)
I have two different datafeeds, with T/S displayed so that I can see the real bid/offer on a stock (IB quotes STINK)
I got so infuriated one day, I called the IB help desk and demanded that one of them stayed on the phone with me while I showed them how my bids/offers would never show up as the best bid/offer in spite of the fact that _I_WAS_THE_BEST_BID_OFFER_. I did this with several stocks to prove that it was not the stock. To the amazement of the IB help guy, he did not understand why this was happening. He said he would look into it.
A couple of days later, I got a call saying that someone had talked to one of the specialists and that his answer was that he doesn't "always" have time to update his quotes.
Now, and here is my belief on this:
**************
The only way you or I are ever going to find this out is by having prop experience. Even better, it would be great if when at a prop firm, we put in identical orders at IB and at the prop firm and compare.
**************
(Unfortunately, I do not know how prop firms treat this. From what I understand, they want to know all the accounts that you have when you trade with them. This may be for other reasons though, and it may be OK to have them as long as you tell about them. In addition, many if not all prop firms do not allow connections to the Internet from their computers, except for their execution systems.)
Therefore, I have to agree with RTHarp above and Gene - you get what you pay for, for sure.
In the meantime, IB is a great platform to get your feet wet trading, or just fine for swing or longer time trading/investing. I don't swing, but do invest with an IB account and it works OK for this.
However, IMHO, you would be _CRAZY_ to _SCALP_TRADE_ with size with IB, or strategies that are time critical at IB.
nitro
I am with IB for about two years. I trade 98% listed and 2% NASDAQ.
On NASDAQ, I wouldn't hesitate to use IB. The executions are lighting fast as anywhere I have seen. In addition, if I am the best bid/offer, it will be displayed in the L2.
_HOWEVER_, on Listed, maybe one in a thirty times do I see my bid/offer displayed when my bid/offer is the best bid/offer (BTW, I know of the uptick rule, which could cause your offer not to be displayed in those cases.)
I have two different datafeeds, with T/S displayed so that I can see the real bid/offer on a stock (IB quotes STINK)
I got so infuriated one day, I called the IB help desk and demanded that one of them stayed on the phone with me while I showed them how my bids/offers would never show up as the best bid/offer in spite of the fact that _I_WAS_THE_BEST_BID_OFFER_. I did this with several stocks to prove that it was not the stock. To the amazement of the IB help guy, he did not understand why this was happening. He said he would look into it.
A couple of days later, I got a call saying that someone had talked to one of the specialists and that his answer was that he doesn't "always" have time to update his quotes.
Now, and here is my belief on this:
**************
The only way you or I are ever going to find this out is by having prop experience. Even better, it would be great if when at a prop firm, we put in identical orders at IB and at the prop firm and compare.
**************
(Unfortunately, I do not know how prop firms treat this. From what I understand, they want to know all the accounts that you have when you trade with them. This may be for other reasons though, and it may be OK to have them as long as you tell about them. In addition, many if not all prop firms do not allow connections to the Internet from their computers, except for their execution systems.)
Therefore, I have to agree with RTHarp above and Gene - you get what you pay for, for sure.
In the meantime, IB is a great platform to get your feet wet trading, or just fine for swing or longer time trading/investing. I don't swing, but do invest with an IB account and it works OK for this.
However, IMHO, you would be _CRAZY_ to _SCALP_TRADE_ with size with IB, or strategies that are time critical at IB.
nitro
Nitro,
I don't believe what you are experiencing is a result of IB. When your IB NYSE order goes green, that means its been sent via superdot to the specialist and is out of the hands of IB. Thus whatever the specialist does with this order is up to him, and you won't get any better with another broker. On occasion if my limit order is better than the quoted price, the specialist will update his price to reflect my order. However this appears to happen more frequently on thinly trade stocks.
Even if you order is not reflected in the quote, be assured that your superior price will be a factor in your execution. For example if the spread is 40 x 40.25, and you enter a sell order at 40.24, then even if your order isn't shown, you still have priority over all other sell orders at 40.25, excluding market orders of course.
If you really want to be seen by the world, you could always route your NYSE order to an ecn such as island.
I don't believe what you are experiencing is a result of IB. When your IB NYSE order goes green, that means its been sent via superdot to the specialist and is out of the hands of IB. Thus whatever the specialist does with this order is up to him, and you won't get any better with another broker. On occasion if my limit order is better than the quoted price, the specialist will update his price to reflect my order. However this appears to happen more frequently on thinly trade stocks.
Even if you order is not reflected in the quote, be assured that your superior price will be a factor in your execution. For example if the spread is 40 x 40.25, and you enter a sell order at 40.24, then even if your order isn't shown, you still have priority over all other sell orders at 40.25, excluding market orders of course.
If you really want to be seen by the world, you could always route your NYSE order to an ecn such as island.
Nitro,
I use IB and have had the same experience with listed stocks(great for nas though). I have never traded listed stocks anywhere else. Do you have better luck having your order show or get filled with another broker or firm? I thought these problems were mostly dirty specialist tricks.
I use IB and have had the same experience with listed stocks(great for nas though). I have never traded listed stocks anywhere else. Do you have better luck having your order show or get filled with another broker or firm? I thought these problems were mostly dirty specialist tricks.
Just an unbiased note. The only true auto-execution on listed stocks is available on ECN's ISLD or REDI. NYSE NX Direct is NYSE version of an auto-ex and it is pretty quick and you have the potential for price improvement. I use NYSE direct for listed stocks most of the time. There are rules for using NYSE direct, and if you abuse NYSE direct your trades could be"busted",such as breaking up larger orders or entering orders in the same security in less than 30 second intervals, see www.redi.com/apr12.html . ECN's have no time interval or "unbunching" rules that I am aware of. Try NYSE direct and I think you will like NYSE executions alot better. The NYSE specialist can legally holde Mkt orders , for example ,up to a minute under certain circumstances and I think most direct access traders will feel like this is 1/2 hour! Be aware that ECN's will not offer price improvement. I do
not know if IB has a route to NYSE direct , REDI+ and other direct access platforms do.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
not know if IB has a route to NYSE direct , REDI+ and other direct access platforms do.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
Magna
Administrator
What is more important than cheap commission?
Robert, Gene and Nitro all made good points. I've posted some of these reasons in other threads, but it's worth a re-post here. Having used both Realtick and CyberTrader extensively, all of the following are advantages over IB (if it's specific to one of those platforms I name it in parentheses):
Robert, Gene and Nitro all made good points. I've posted some of these reasons in other threads, but it's worth a re-post here. Having used both Realtick and CyberTrader extensively, all of the following are advantages over IB (if it's specific to one of those platforms I name it in parentheses):
- Can reach a broker if you need to get out of a position(s) fast.
- Can reach customer service easily with questions, and they are actually friendly!
- Level 2 books
- Charts
- Time & Sales (Cyber is very limited in this regard, only offering ticker info on the stock in your L2 box, and only back 40 trades which might be a 1/2 second in a fast-moving stock)
- Trailing stops
- Realtime scanning (CyberQuant in Cyber, Hottrends in Realtick, lots of 3rd party scanners like SortWizard, TradeSeeker, StormChaser, iScan, OzScans, etc. use the TAL Realtick data feed)
- Alerts
- Written statements
- Check-writing
- Comprehensive, easily configurable and sortable watchlists
- ARCA for stops on their server, reserve orders, discretionary orders, to "work" short orders, change-orders without addt'l charge (Realtick only, on Cyber ARCA is very limited although it will work orders, but no stops, reserves, etc.)