ETF's, Trade Thru Rule, ISLD

Discussion in 'ETFs' started by davez, Feb 4, 2004.

  1. davez


    Can someone tell me if ETF's (SMH in particular) are affected by the trade thru rule?

    Over a dozen times in the last few days, I have tried to Buy (to cover a short position) on ISLD. I typically wait to exit a Short until I think a rally has started, and so I want to get out immediately. If the inside market is say 40.50 x 40.52, I'll input an ISLD Buy Limit order for 40.6.

    But what is happening (in Interactive Brokers system) is my order just sits there, even though I can see in the ISLD book that there are many ISLD offers below my limit price.

    It took calls to four people at IB before someone thought that maybe the trade thru rule is preventing my order from executing. That is, if AMEX happens to have the best offer of 40.52, and ISLD's best offer is 40.54, my limit order is prevented from being matched to the ISLD best offer because that ISLD offer is above the market.

    If someone knows that the trade thru rule is what would prevent my order from filling, even though my buy limit price is above the market, I'd appreciate your time to answer this question.

    Thank you
  2. have you tryed directing it to isld and not smart?
  3. davez


    I am using Island routing.

    Trading Nasdaq stocks works very well with Smart routing, but when I tried using Smart to trade SMH, too many times I got routed to AMEX or NYSE, where my order sat, unfilled, while the market moved on. Because AMEX and NYSE are so slow to update their quotes, is why I switched from Smart to ISLD routing