What follows is, of course, MHO. YMMV. The tone of the original post is kind of harsh, so I'm not making any effort to be non-confrontational. The author should not take it personally
Originally posted by 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
This is simply the way that NYSE is. It mostly doesn't stop your order from getting exposure to the crowd via the specialist if warranted. You can't really think that offering 1000 shares a penny inside a 0.05 spread when there are 50000 shares to buy and sell standing there at any given time is going to get you done any faster. In a liquid stock (like most Dow and SPX components), there is so much order flow in size that completely overshadows any orders that retail traders like us are likely to place, there is no point in continuously updating the quote. The specialist is almost constantly batching orders that cross and printing them.
As someone pointed out, you can always send your order to an ECN, but my experience in most stocks (except maybe QQQ?) is that you won't ever get a fill that is in your favor. Sure, you'll get your bid hit, but it'll be just before the NYSE market comes down through you. If the specialist _were_ to update his quote constantly to reflect the electronic book, it wouldn't be any different. The auction market, and size, is what drives most of these stocks, regardless of what's displayed.
With the advent of OpenBook, I'd expect that we're going to find out if it matters. You're still not going to know when someone walks into the GE crowd with 500K shares to buy, though.
I have two different datafeeds, with T/S displayed so that I can see the real bid/offer on a stock (IB quotes STINK)
IB's NYSE quotes consistently outperform myTrack and ProTrader. They're (IB) the best I've seen.
To the amazement of the IB help guy, he did not understand why this was happening. He said he would look into it.
He must have been a newbie.
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.
If the order goes to SuperDot, it goes to SuperDot. It doesn't matter which firm it comes from. Other than Direct+, which will never show in the quote (it's for execution only), there is no other choice except to give your order to a floor broker, who will stand in the crowd and get you filled. You'll have to be trading some size, with an institutional broker. If you are disappointed with the speed or transparency of the electronic systems, try that just once
However, imho, you would be _CRAZY_ to _SCALP_TRADE_ with size with IB, or strategies that are time critical at IB.
You would be crazy to scalp trade NYSE stocks via the NYSE's execution systems, period, unless your strategy involves reading the specialist and fading the lemmings. There are people that do this successfully. It's nothing like trading NASDAQ stocks.
IB sends your orders to SuperDot (or any of the ECNs if you like) just like any other broker. In my experience, their timing in doing that is as good as anyone's, and better than most.
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.
I trade a couple hundred thousand listed shares a month at IB. Most of my trades are on the ecns, and I'm often in them for seconds. I get acks and cancels within 2 seconds, and usually less than a second, from the ecns. Orders sent to NYSE are executed as well and as fast as (but mostly better than) any other broker I've been with in recent years (Waterhouse, MB Trading, Wit Capital, ETrade, Track Data).
