IB SMART routing and BATS rebates

Discussion in 'Order Execution' started by Daal, Dec 22, 2011.

  1. I wanted to confirm IB customers (API and TWS) can customize their SMART routing to rest their unmarketable orders on the exchange with the highest rebate.

    Available strategies include:

    Smart - Routes your non-marketable order to the default exchange for the contract.
    Highest Rebate - Routes your non-marketable order to the exchange offering the highest rebate for added liquidity.
    Primary exchange - Routes your non-marketable order to the listing exchange for the contract.
    Highest volume exchange with rebate - Routes your non-marketable order to the exchange with the most volume that also offers the highest rebate for added liquidity.
    Highest volume exchange with lowest (taker) fee - Routes your non-marketable order to the exchange with the most volume that also charges the lowest fee for taking liquidity.
     
    #21     Oct 3, 2012
    murray t turtle likes this.
  2. JSOP

    JSOP

    And YES they do. IB DOES internalize their order flows. And they disclose it clearly in this document:

    https://gdcdyn.interactivebrokers.c...rmSampleView?ad=order_routing_disclosure.html

    And in it, IB especially talked about how IB sends orders to its subsidiary Timber Hill BEFORE it sends them to exchanges and Timber Hill is a significant market maker on especially option exchanges just like what Options12 said here.

    But according to all the regulatory bodies, it's ok. Their rule is as long as you disclose it, everything is ok.
     
    #22     Mar 5, 2017
  3. d08

    d08

    Are the SMART strategy (primary exchange, highest rebate etc.) orders commissions the same as plain SMART or are they considered to be directed?
    The problem is that IB seems to prefer BATS but there's hardly any volume on it in most names when using MIDPRICE, so I'm left with dead orders, rendering it useless.
     
    #23     Apr 6, 2021