Discussion in 'Retail Brokers' started by tntneo, Feb 2, 2001.
Has anyone heard anything new about this policy?
why would any direct access broker want any clients that were going to trade less than 100 shares a time?
waste of their time and resources.
You CAN submit orders for listed stocks with IB for any quantity over 100 shares (101, 150, 275, etc). I do it every day, they are handled and filled by specialist just like regular round lots.
Also, you can buy 100 shares, and then enter an order to sell an odd lot to close part of the position.
Just don't abuse this by placing an order to buy an odd lot at the bid, or sell and odd lot at the offer. That's what got the NYSE pissed in the first place.
Odd lots are given some kind of preferential treatment and are sometimes filled at the most favorable end of the spread. There is a rule against a trader taking advantage of this on a repeated basis in the same stock on the same day.
yep it's true. I was doing some tests long ago trading with below 100 shares orders at bid and ask... NYSE did not like that at all and I got a warning letter.. A few weeks later, IB enforced 100 min to trade listed..
don't throw stones at me, I am sure I was not the only one and that's why NYSE was pissed off. I did not realize you could send odd lots above 100 easily though. But I can understand why it's OK with the specialist.
I also traded a lot of NYSE odd lots, you know, back when GLW was $300 a share. I never consciously tried to buy bid or sell ask, had now idea there was a rule, etc. I got some emails from IB about the issue, and then tried to get a wire out of my account and they held it up saying there was an investigation in progress and some specialists were going to come after me for damages. Whoa, like I probably might have been on the hook for some pocket change, and they were holding up my paycheck! To IB's credit, it only took one email from me to get the money flowing again, but sheesh. Then, I never heard another word about it.
Can anyone post a reference to what this odd lot rule is EXACTLY .
it's quite simple (and stated above in IB's statement) no limit orders for trades with less than 100 shares (you can use market though).
IB made it very strict (I guess, fed up with NYSE) : no trades below 100 shares period.
Orders for less than 100 shares placed on the bid or offer do get preferencial treatment. They are automatically place in the front of the book and that is why the NYSE do not want traders to take advantage of this.
For example if stock XYZ's quote is 10.00 X 10.15 500x500;
You place an order to buy 99 shares at 10; you are put in front of the book. So if 100 shares trade at 10 you are filled for your 99 shares. Then you put a sell 99 shares at 10.15. IF 100 shares trade at 10.15 you are filled. So it is obvious why the NYSE and the specialist do not want you to abuse this.
What about buy stop orders on DIA... if I want to enter a 50 share position on DIA, can I do so with a buy stop order?
no, although you can in theory send orders for DIA or QQQ on island with less than 100 shares, IB will prevent you to do so...
(even with Island routing). try it, it won't work : stop, limit or market order.
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