that does not answer the question we asked at all. When you consider the IB darkpool an exchange (which it legally is) and given the IB darkpool algo has knowledge of prices at all alternative exchanges (which it certainly does at all times) then SMART may route to IB's dark pool first at most times when it seems advantageous to IB's dark pool division or Timber Hill in particular. So, indirectly Timber Hill may still get a first-look indirectly. The client still benefits via price improvement so its hard to complain about that but nonetheless it could pose potential conflicts of interest and is something you continuously refuse to disclose and/or explain in detail.
This topic has been discussed many times. As an experienced trader with 20 years in the marke who has dealt with many brokers, my answer is that you are just wasting your time unless you are writing a paper on comparing brokers for your course in university. When a broker starts to screw you, you will feel it in all your blood red cells and brain cells!!. They will charge you 8% margin fee, deposit fee, withrawal feel, high fee on naked options, etc. You wont need to investigate. You will feel it. Here is a way to find out. Do you have an account with IB? Do you trade a lot? When your trade gets executed, do you see the execution rate is different from the rates that just happened? I am not talking about less than 100 shares. That is a different story. I have always put this as a challenge and I am very sincere on this. I always ask if you know any better broker than IB, please let me know and I will switch in a blink of eye. My requirements are that I will not and cannot promise to trade 100,0000+ option contracts to get low rate. One month I might trade 5 contracts and the next month, I might trade 15000 contracts. Most of the time I put orders to add liquidity and I get rebates. I have attached my last weeks trade and if you know any other broker who charges less than this, please, please, please let me know. Please also compare your brokers margin rate with IB. At the end I understand that a broker is doing its business to make money but if its practice is in a way that I dont get screwed, I would not care. I dont want to police my broker. If my broker wants to screw me, I would feel that.
By the way does your broker charges you a transaction fee when your options are assigned or your shares called away? IB does not. If IB's motto is "lets screw customers" they could easily charge a transaction fee for that. I know many brokers do that which I don't want to name them here.
This link puts multiple nails to the coffin of threads like this: http://www.themargininvestor.com/margin-rate-comparison.html
Margins and rates can be used as "loss leaders" to attract the more gullible shopper. I have zero expertise in the area of market microstructure but I believe @volpunter does. If he wants to start an inquisition, though I know he can be insufferable at times, he is still doing us a service.
I am not here to discredit anyone's expertise. If it was so easy to attract new customers just by low margin, other new brokers would also have followed that. By the way you cannot call IB customers as gullible. I just say maybe 70% of the IB traders are experienced traders. I did not mean profitable.
hajimow, your posts are way off-topic and make you sound like a shill, but thanks for sharing anyway. Question: if you chase rebates by adding liquidity, why did you go to BOX to close those 13 MCD contracts a minute after you opened them at CBOE? Was that particular trade an auto-liquidation?
Now you want to know how I make money? don't you? You are going even one step away from topic. When you open an account with a bank, do you tell them how to manage your money? who to lend and where to keep your money? Have you ever seen any problem with IB's execution? My point is why do you care how the trades are handled? Specially if you are trading 2 SPY contracts and keeping it for 3 months !!!! I have put an exact trade with broker A and then one hour later put the same trade with IB and after 15 minutes my IB trade was executed (it was a limit order) while my order with broker A was still sitting idle. I have seen it many many times. Just to be fair and answer your question, I had multiple orders which were executed at the same time (which I did not expect) so I had to close some after both went through. But once again is away the topic. I am not chasing rebates. I am trading with a commission that no other broker except IB can offer.
No. I was actually wondering how you lost money on that trade when the contract price was unchanged. You lost a few bucks due to the higher commission. You paid $0.42 per contract to open the trade at CBOE, but $0.79 per contract to close it at BOX. Was that a limit or market order that you used to close the 13 contracts? This particular question is actually relevant to the topic of this thread. I will explain why in a future post.