#1 the opposite order: if an IB customer & TH are sitting on the exchange at the ask price, then comes along an IB customer to buy at the ask. #2: I didn't mean, but it would be interesting to know what would happen if customer A's order is being held on the IB server (to sell at the aks), and another IB customer places an order to buy at the ask price, will the fill be between the 2 IB customers, or will TH get priority to sell at the ask.
Good question, but I'm afraid I don't have the specific details to answer it. However, I'm fairly sure the client orders will not match internally as IB would stand the chance of a double fill (ie. filled internally before a cancel gets through externally).
Def: A question for you. There is a conflict of interest isn't there? For example: As mentioned by you Timber Hill is a dark pool of liquidity because you get filled when you hit the inside bid or offer, there are enough shares on either Inet or Arca and yet these shares are not lifted. Instead you get filled by Timber Hill who was not visible on the inside offer. Let's assume that you hit the offer and buy. Timber Hill has taken the opposite side of your trade. He will run the stock down until he sells at a profit. In the interim you are stuck with your order that you bought. I've seen this happen time and again to my orders. Something else that happens in these situations. Assuming the same example above, if the price starts going up you'll see Timber Hill showing size on the inside offer driviing the price down. How is there not a conflict of interest?
If Timber hill does that with no knowledge of your orders (other than that seen at the various marketplaces) how is that a "conflict of interest" The purpose of a chinese wall is to prevent internal customers from competing unfairly with external customers. It doesn't stop a good trader (assuming Timber Hill is one) from raping you aggressively in the market place Timber Hill will always be in conflict with you (unless its in the giving away money business). The question is only: are IB's systems preventing the internal customer from getting information about customers that is not available in the marketplace Wouldn't you bet that IB would have been pillaged in the courts if that wasn't the case?
Sure I would. IB is here to make money for itself even at the expense of its clients. You can bet your butt that Timber HIll does that with knowledge of your orders. How do you think I get filled by Timber Hill and only Timber Hill and not other MMs, Ecns etc. You think that is a coincidence? NO such thing.
I've been trading for a while and let me tell you I don't allow myself to be raped passively let alone aggresively.
As I'd consider myself an insider, I'm surprised you think you know more than I do. The fact is Timber does not make decisions based on IB client info. This has been stated by numerous people on this site including the chairman of our firm during the previous earning's conference call.
I believe he's talking FX while I am talking stock/options/futures. Regardless, that does not contract the above statement regarding the Chinese wall.