Can a broker change your limit price?

Discussion in 'Order Execution' started by Toonces, Aug 18, 2010.

  1. Toonces


    If I place an order to buy at 3.00, for example, can the broker change my limit price to 2.99? This isn't a hypothetical, IB is doing it to me for some reason. And I'm missing fills because of it.

    Also, is a broker obligated to fill your order to all exchanges? For example, let's say that there are 10,000 shares offered at 3.00...5,000 are offered through INET, and the other 5,000 are offered through ARCA. I use a smart order to buy 10,000 shares at 3.00, and I get filled for 5,000 through INET. The other 5,000 shares offered through ARCA are still available, even though I still have a bid of 5,000 shares at 3.00. (Which for some reason will probably change to 2.99). Before I can resubmit my order, or go direct to ARCA, someone else has taken those 5,000 shares.
  2. This is a bug in IB system....I have seen this for years, and have filed multiple complaints. I haven't seen it lately though.

    Basically u try to lift the offer of $3, and it bids you against it at $2.99. No matter what router you use, it just bids you against it. I've tried to troubleshoot it with IB, but those tech guys are useless. Anybody else see this problem before?
  3. Toonces


    I honestly can't believe they get away with this...seems like an illegal practice.
  4. olias


    I have no idea, but can I suggest you change the title of your thread so that 'IB' shows up in there? They have a rep or two that are pretty active on this site and if they see your thread you might get a faster explanation.
  5. tommintj


    You may have been sub-pennyed. Broker dealers cannot accept a bid/offer in fractions of a cent (except if price is sub buck) but the BD can trade against it or step in front of your order by a fraction of a cent (2.9999 or 3.0001).

    If you can, set the bid/ask resolution to more than two decimal places to see this behavior.
  6. MR.NBBO


    Your order is being re-priced by the exchange for NMS compliance for any order that would lock the market.

    This includes orders that would not route out, given a particular routing strategy--such as frequently seen with IB SMART "route for highest rebate". Your example sounds like INET TFTY, which will not cross against ARCA, hence the reprice.