Directedge and IB

Discussion in 'Order Execution' started by stock777, May 14, 2007.

  1. I notice that IB does not seem to list directedge as a routing to NYSE listed stocks, even though they trade over there.

    Has anyone else noticed this?

    I watch some thin stuff, where directedge is making the best market , so it matters.
  2. rayl


    Seems that way looking at the listings at:

    It also appears that OTCBB issues are not routable to DirectEdge either, though they're also DirectEdge tradable:

    "The Direct Edge ECN currently trades in all Tape A, Tape B, Tape C and OTCBB securities. "

    I could be wrong about this as I've only read summaries and not the full text and related literature on Reg NMS:

    For NMS stocks, if Direct Edge has a protected inside quote, your order will match get the quote if it is routed to any protected market center as Direct Edge is a potential protected market center (once Reg NMS phases in that is).
  3. Meanwhile, we have a problem in that it looks like the prints on DE are not shown on IB.
  4. Anyone from IB care to comment on this.

    IF DirectEdge is a major player on NYSE, shouldnt you be routing there?
  5. I would think routing to DirectEdge is required by law. If they can't route to a market center which sometimes provides the best deal, then they can't fulfill their duty to provide best execution, and I think Reg NMS would also require it if IB is going to use intermarket sweep orders. If IB can't route to DirectEdge, and if no other market center can compete with DirectEdge's quote, at times, then it would, at those times, often be impossible to execute at all because of Reg NMS restrictions, until some other market center reached the inside quote. I would also think such routing is required as a consequence of the way IB advertises its SMART router. I hope an IB rep can explain this, so we can continue to have confidence in the SMART router.
  6. Exactly.

    Can anyone else confirm this 'issue' on major stocks, I've noticed this on some oddballs I watch, which made it easy to spot.

    I don't see the problem, since IB routes to DE on Nasdaq
  7. rayl


    I would love to hear about DirectEdge and other supported stocks beyond GMS issues as well.

    But just to point out, direct routing to DirectEdge is not required per se for Reg NMS compliance as many other venues support routing out for compliance if the order is so designated.
  8. IB doesn't provide DirectEdge as a routing option for SPY, even though SPY trades on DirectEdge.
  9. IB doesn't, as far as I know, provide any way to route to DirectEdge by routing through some other market center. The last I heard, it was IB policy always to send orders flagged with an instruction that the destination market center is not permitted to route the order elsewhere.
  10. rayl


    I assume that has to change with NMS stocks phasing in on July 9 through Oct, as there're at least 13 protected NMS market centers including 3 ADFs:

    1. Direct Edge
    2. LavaFlow (fka NexTrade)
    3. Track

    And I don't recall IB offering direct routing to Lava or Track at all.

    Maybe we also need an updated IB FAQ on how routing will work with NMS!
    #10     May 16, 2007