I recently opened an account with IB. So far, I have been very pleased with their executions in general. However, some of the fills I have gotten from TMBR have been amazing. This morning, I got price improvement on an illiquid Naz and then they took the other side of a listed short sell in a downtrend. :eek: Amazed, Cheeks
Cheeks thanks for the comment. Didn't read this before posting about the question of the TMBR route. Just21, IB has a proprietary market making arm called Timber Hill which is one of the leading market makers in listed equity options and traders of listed stock. They make two sided internal (and external for some Nasdaq stocks) in all the products they trade. IB takes the TMBR internal price and includes it in the bid/ask prices of all the other ECN's and exchanges. If TMBR's price is equal or better than the NBBO, the order will be routed to TMBR. Since the order is already on our network, the speed of fills are virtually instant. In short, think of TMBR's prop side as a hidden ECN.
I wonder what it would take for TMBR to actually be recognized as an ECN, or maybe there is another way to make it available to non-IB customers. If you trade NYSE listed stocks you can basically save yourself an average of $.01 per share just by using IB's SMART (which includes TMBR) as opposed to routing your order directly to the NYSE. Has TMBR ever thought of making the tight markets they are making on Island instead of just internally for IB customers? From what I understand, they would collect liquidity rebates, so cost should not be an issue. Neither should speed (with Island). I guess the NYSE would not be happy about that, and we all know they could cause serious problems (like forcing ISLD quotes to be hidden), but until any such new measures take effect, TMBR could certainly make a killing.
If TMBR exposes their liquidity on a public ECN, it would seem there would less of it available for us (IB uers). Also, seeing their quotes would probably result in people taking them out when they are out of line with the general trend (for their own reasons, as has been previously pointed out). The only way that happens now is if you happen to get an exec from TMBR and then hit them again once you discover their hidden interest. Since this is pretty inefficient, it leaves a lot of TMBR liquidity around, for which we are certainly grateful
Thank you for these explanations about how TMBR work. In another thread, some days ago, I have asked a question about TMBR and the Destination under the TWS. My purpose was more about to know indirectly the depth on Nyse stock for TMBR, because on Level II I am able to evaluate how far is TMBR and if the Smart will fill me quickly or if I will have to go at the next stage route for a given Nasdaq stock, but for NYSE I am not able to see this information with the market depth and since the TWS seem to have drop TMBR information, I would like to know if it is possible to see what is the best price on TMBR for a listed stock?
We (timber hill)are market makers on NASDAQ stocks that you see TMBR. We are not market makers for NYSE. Providing that information would not benefit our prop side and could even help the specialist (we are one of the most active NYSE trading firms) as they could lean on orders. Given that our prop side is in the business of trying to make money, I don't see why we'd want to provide that information.