i-Routing, market order, and NITE executio

Discussion in 'Order Execution' started by viewpoint, Nov 27, 2002.

  1. Yesterday, I opened a long position in NXTL, with a market order, using my broker's automatic routing. The order was routed to NITE and was filled quickly.

    But when I tried to close the position by Sell at Market, i-routing again, it was routed to NITE again, and took 17 second to fill. Look ...

    Order Time: 11/26/02 3:11:19
    Reported Time: 11/26/02 3:11:36

    Action: Sell Ticker: NXTL

    Quantity: 700 Price: 12.880

    Commission: 0.00* Broker: NITE

    (*I got a free trade because I had resolved a dispute with the broker.)

    (I'm new to DAT trading), I was using market sell order to exit the long as quickly as possible. Turns out that I lost another 2 cents while I was waiting for the fill.

    I called the broker and was told that, NITE might have had orders ahead of me, but 17 seconds seem a bit of stretch, normally market orders are filled within a few seconds.

    Later on, I was also told that, if I send a market order, it goes to a market maker only, not an ECN, and I will get the NBBO price I'm looking at only if the market maker is represented at the NBBO (inside price), otherwise I must wait until the market maker is represented at a NBBO before my order is filled. (which presumably might be much worse fill than what I was looking at.)

    1) Based on this info, I might not use market order again, not knowing when it will get filled.

    2) I need to familiarize myself with different market makers and how they operate. My broker can route to Knight, Schwab Capital Markets and Goldman. If I trade fewer than 1000 shares, and only trade liquid stocks like NXTL which is the best market maker to ever route to?

    3) I have the option to route to SOES. Should I have routed to SOES in this situation? Would it have filled me immediately at the inside price? Would it depend on whether one of the aforementioned market makers (Knight, Schwab, Goldman) was represented at the inside price?

    For now, I will only use a limit order that will clear the market immediately (for example, buy limit above the best ask) to exit a position.
  2. I would send a soes order if you are trading real liquid stocks. Unless your broker has some wack ass routing situation it should hit any marketmaker that is the best price. Only time you will get screwed for the absolute best prices with a soes is if there are not enough shares to soes or if AMEX, ISLD, or INCA (ADFN) are at the best inside prices and there are no market makers there. The soes order will trade thru those prices. You can thank the rules of supermontage for that. Hopefully that helps.
  3. what broker are you using?
  4. myTrack; after 1 month, I'm not exactly happy with them; but at the same time, I still think it was a good decision to get a software-based DAT broker (I was using Datek right before); I don't want to lose any time switching brokers. I'll stay with mT one more month, then I might switch to another broker.
  5. Also ...

    I talked to another guy soon afterwards, and he told me that 17 seconds on market order is pretty quick, it could take up to 1 minute ...I will not comment on this ...but

    I remember talking to this guy before ...I had asked him about entering limit orders to CINN at down to the third decimal (tenth of penny) and he complained about how people would even consider something like this, after decimal system had been already introduced ...I got an impression that even this DAT broker might be interested in directing order flow to favorite market maker, making money off the spread , etc. What's more, I found out that myTrack sends i-route limit orders to TRAC, their own ECN, whenever they can.

    If you have an honest and professional broker, besides IB, let me know.
  6. What's wrong with IB? Fills too fast? Commissions too low?
  7. I tried a demo on IB and it seemed awkward.

    Does IB have hot keys?
    Does IB link to other charting programs? If so which ones?
    Level 2?

    What I tried seemed like a quote board, then I was suppose to click on a symbol to make a trade.....Does that sound correct?
  8. Yes, they have configurable hotkeys and -clicks.

    The demo is not as good as the real thing.

    IB intend to deliver the best execution and the best price, they never wanted to be a charting application.

    However, their datafeed has recently become so good that Medved Quotetracker fully supports them (charts and integrated trading). IB also have an API which allows you to write your own applications or interfaces to other applications.

    After switching to IB from a "web-based" broker, I almost can't believe I ever tried to trade using all those forms and confirmation pages. It's so much more efficient to click and trade through IB. From time to time I make an order entry mistake and lose a few bucks, but there are far more times when I just happen to glance at a quote and "go from opportunity to execution", and I mean in and out, within 10 seconds.
  9. I have 2 accounts with direct access brokers. Both provide the level 2 charting and other little nuances to help me make a profit. Why would it be to my advantage to go with IB?

    I only ask because I didn't see the value in IB. I hoping you can open my eyes to something I missed.
  10. The only real advantages are the best executions anywhere (you would have to try that) and the lowest commissions. They include all ECN fees and even that funky .0000000000000000003% SEC fee on sales. But if you do size (>2000 shares per order) it's probably all the same. If you trade 100 share lots, the savings are obvious.
    #10     Nov 29, 2002