nx is a great tool...unless the specialist decides to show down/up a point against you with a size of >100 (can't nx if specialist shows 100 shares). then what happens? someone comes in and nx's it down/up a point...ouch.:eek:
yes, you can avoid the specialist. you'd have to route to an ECN. there is no "nas" execution with IB. keep in mind that as the daily volume of an NYSE (listed) stock drops, the % of trades that are executed at NYSE increases...i.e. you will most likely be able to get an ECN fill for a stock like LU or GE, but not with say KMG. as for the fee question with IB, you are absolutely correct. (i forgot to qualify my earlier remark by saying that if you trade 5k share lots, IB will not be cheapest. i trade expensive listed stocks primarily, and in small lots per trade, so for me, IB is cheapest, plus I can route my order wherever i like and not pay any extra fees for this priviledge). if you are scalping say, 5k lots of LU for pennies, you are much better off with datek's flat fee of $10/trade....
In my experience, in all but a limited set of circumstances*, you will get an inferior fill when going to an ECN instead of NYSE during market hours. Most of the time, if you get a fill, it's because someone else who is better aware of the floor market took you out and flipped it to the floor for a quick scalp. *Some circumstances are: - "Fast" chaotic markets, like the time immediately after a delayed, gapped open or important news. You're still just guessing by going to the ECNs, but at least there are more people guessing along with you, and you're more likely to get what will turn out to have been a good fill. - ETFs. That's why Island can't display QQQ quotes any more :-( - Stocks with particularly annoying specialists, but seemingly only stocks that are neither too liquid, nor too illiquid. The more people the spec pisses off, the more action flows to the ECNs, just to spite him.
In my experience, in all but a limited set of circumstances*, you will get an inferior fill when going to an ECN instead of NYSE during market hours. alanm- I agree with you 100%, however , most traders would rather have fast fills than gain .01 on a trade. So if NYSE NX gives you a better fill most of the time( gain .01 over ISLD), most small traders feel the extra 3 seconds to get an NX fill is not worth it or they may not have an NX route on their orders. If you trade 10,000 shares a day NYSE (10,000 X .01), you could save an extra $100 dollars on price improvement VS ISLD . I would tell traders that NYSE is a different market and fills are generally "slower" than NASDAQ. Trading NYSE with the specialist is like trading in slow motion compared with NASDAQ. Don't confuse speed of execution, with price improvement potential. Gene Weissman Lieber & Weissman Sec., LLC gweissman@stocktrade.net
Generally slower? ALWAYS slower is more like it. Also, Island is not considered a great ECN for listed executions. Arca and Inca are better ones. I route orders to both of them and to Sdot and in MUCH more than "a limited set of circumstances..." I get better fills than with a specialist. "limited.." is an exaggeration.
fattyasids , If you go away from the "primary" market, you are giving up price improvement all of the time. I doubt you would get better fills on ECN's, sometimes it just seems that way. ECN's of course are much faster than the NYSE. Try NYSE NX(direct) and see if you like the fills & execution. I think you will be suprised. Gene Weissman Lieber & Weissman Sec., LLC gweissman@stocktrade.net
I was speaking from personal experience. I used NX. I have a key that sweeps the market on ECNs and goes to the specialist. I usually get fills from multiple sources so that I can compare where I get better fills. Do you use specialists exclusively?
fattyasids, The route we use depends on the order size, liquidity of stocks we are trading and market conditions. We trade alot of oil stocks , drillers and large cap NYSE stocks. On 2000 + shares , we go to the NYSE specilaist "dot". On 1000 shares or less we use NX , with good results. Of course, if there is a layup on an ECN, we will try to "grap" that stock with 1000 other traders! I would say use what works for you. If you are getting fast ECN fills and you are comfortable, go to the ECN's. Gene Weissman Lieber & Weissman Sec., LLC gweissman@stocktrade.net
fattyasids: I suppose "limited" is relative to what/how you trade. If you trade during those circumstances alot, "limited" would indeed seem to be an exaggeration What stocks do you trade, and when? If you split up an order and send it to multiple sources, that would definitely seem to be the way to benchmark where the best fills are. I'm guessing that the "quality" issue is one of getting filled or not on NYSE, unless you're using market orders there. If possible, could you post some recent examples - I think they'd be instructional.