Def, could you please bring up this issue within IB? Unfortunately and as usual, the helpdesk (except for Dan) is utterly clueless and not even willing to look further into this issue. They insist that no changes have been made to the order submission with REDI which can't possibly be true. Starting a few weeks ago marketable limit short sale orders entered on REDI with the stock on a downtick no longer behave as documented (see excerpt of documentation below). Instead of following the inside market down within the limit price 1 cent above the inside bid until taken out it just keeps sitting at the initial price where it was put in observance of the uptick rule. Cross-verification with other brokers have shown that no undocumented changes have been made on REDI's side. Judging from the REDI order book it seems that IB no longer submits marketable short sale limit orders to REDI at the limit price intended by the customer if entered with the stock on a downtick but instead submits a modified order with a limit price 1 cent above the inside bid (or possibly a REDI inside quote order) without disclosing this to the customer. Their programmers do not seem to realize that REDI takes care itself of enforcing the uptick rule and that by taking this measure they are depriving their customers of the benefits of REDI's order handling algorithm. It looks like this bug has been introduced along with the fix for short sales on ISLD where until recently IB did not enforce the uptick rule. I hope this bug will be fixed asap. I believe arbitrarily modifying customer orders that abide by all order handling rules without even disclosing it to the customer constitutes at least an ethically if not legally questionable practice. Dave ---------------------------- REDI documentation for limit order handling: Limit Orders. A buy limit order entered above the NBBO will simultaneously bid all the market makers up to and including the limit price. Similarly, a sell limit order entered below the NBBO will simultaneously offer every market maker down to and including the limit price. It will over hit the MM at the limit price entered for any remaining shares. Short sale limit orders will adhere to the short sale rule and be marked up 1/16 on a down bid, following the bid as it moves down, until it reaches the limit price. If the MM/ECN does not respond within the allotted time, it will go to the next available MM/ECN, or it will lock the market if it is at the limit price entered. Any unexecuted shares will be posted to the Level 2 quote at the limit price entered. It is possible to receive executions outside the NBBO, but never outside the limit price entered.
dlinke, You are absolutely correct and thanks for pointing out the problem. I didn't get feedback on how the bug was introduced. However, I was told that it would be fixed within 24 hours.
David, thank you very much for you help and effort in getting this issue resolved this quickly. Your presence and work supporting IB customers on this forum is most appreciated. Dave