I have been trading with IB for about a year and a half without a backup broker. This may seem foolhardy to some, but for the way I trade I think it is best. I don't enter any single trade in such a way that losing connection to IB would devastate my account. I benefit more by being able to use all of my capital - rather than having a portion of it sit idle at another broker - than I would by being able to close my position on those rare occasions when IB is down. Obviously this would not be the case for some styles, but I am sure I have profited more by using my capitol than I would have by avoiding the few small losses that I have incurred because of outages (although when they happen I get very frustrated).
Not a bid deal for me. SMART order routing is quite good with some limitations. The key is understanding when there may be a problem and take appropriate action.
Could one of you describe how you actually use a backup broker to exit a position? I understand that it would be easy enough to park some capital in an alternate account for trading when the primary goes down. (wouldn't want to get bored) But if you want to close a position opened with one broker... How ??? Would you have to prearrange linking of the accounts?
That or you could rely on a principle of quantum trading called equivalence. It basically states that if you have a long position in one account and a short position of the same absolute size in the same instrument in another account, the sum of the market values of the two positions will remain constant for as long as they are open. Or something similar. Might want to look it up in an encyclopedia though, just to be sure.