I just started trading using TradeStation, and am unable to get a straight answer as to the protocol "intelligent" order routing uses. All my limit orders just seem to show up on level II as CINN, which I guess means they went to Island. Anyone know how it works. Also, is there any benefit (or compromise) using it as opposed to just picking a specific ECN? (there are no additional ECN fees over the base commissions) Anyone know of a book or website that discusses the subtleties of order routing?
I thought CINN was cincinnatti stock exchange I believe some systems will put quotes from ISLD in the L2 screen as CINN, because island routes thru the Cincinnati Stock Ex (as of October 2002, so this could be old)
duh i just looked at your post again... I do not know how they decide which one to go thru, but I know in CyberTrader you can prioritize your "smart routing" and move up/down MMID's in the level of importance of where you want your orders to go
Is that Island to Island only if Island is on the inside bid/offer, or do you always go to Island first, which will then send the order to the NASDAQ if it can't be filled by it's own book?
Quote from smoss: All my limit orders just seem to show up on level II as CINN, Most "smart" routing logic applies only to marketable orders in determining how to get you the best/fastest/compromise fill. For non-marketable orders, they usually just default to one particular place - hopefully the one with the most action, or with other features (like rebates) that make them desirable. You seem to be talking about non-marketable orders, and they're probably sending to Island because it's the fastest and most stable route.
It has been my experience with brokers that many do not have any special "smart" router, even when they claim they do. Some piggyback an ECN smart router like ARCA or INCA. Some are"smart" enough (for the broker) to use the cheapest route. This is why your order was posted to CINN which is ISLD. Since ISLD is good for the broker, gives fast fills when there, and gives extremely fast cancels. Your broker would love to have every order posted to the ISLD book and then executed there. They would get a rebate on everything and have very little trading difficulties. Problem is, ISLD is not always the best market. ISLD has no smart routing so your broker would have to monitor the order and the market to see if it should be cancelled and re-routed when it becomes marketable elsewhere. You should ask if they do this. The bottom line is you should always know where your order was routed and the policies and functionality of that trading platform. I would insist your broker tell you what happens to marketable and non-marketable orders for listed, Nasdaq, OTCBB, Pink Sheets. Also, you want to know how stops and other features are handled. (e.g. computer or person? Where does the stop reside?) Beware of general statements like: "continually scans the market" "scans for best price" "searches multiple market places"