Interactive Brokers Smart Routing

Here's more on why I care.

See question 14 in the FAQ:

http://www.sec.gov/interps/legal/mrslb13a.htm

For an example of a disclosure of internalization, see Knight's 606:

http://www.knight.com/ourfirm/rule11Ac16_data_09_2011.asp

IB used to name TH as a venue on their 606 reports. But no more. So I was essentially asking DEF if it is still possible to discover whether TH or another sister affiliate is on the other side of any particular IB customer order, whether the customer used IB's SMART system or not.

 

I just say how I see it: I once used IB, back in the days where I ddidn't understand anything about trading and order routing...

Fact is: you pay with IB for 100 shares ~ USD 1. Please correct me if this is not correct. I also used smart order routing.

Then I was in London with one of the best guys in business I saw in my life... I explained that I trade with IB, using Smart.

his answer: Stop trading with IB... USD 1 for 100 shares is sooooooooooooo expensive... And he explained me a lot of stuff about level 2, their market maker Timberhil etc. We even tested this with my account on this time. I did only understand about 20% of what he told me (my English then was still much worse then now and his London accent did kill the other 40% ;-).

Fact is: If you daytrade there is just no reason at all to do this with IB... I DO NOT NOVE ANYONE DAYTRADING FOR A LIVING AND USING IB... Also TWS is just unusable... No L2, No ecn/passtroughs, hardcore high commis etc.

So: Just do not use IB when you daytrade - it does not make any sense...

 

Such a convincing argument! Closing my account today!

 

Andyc, its not your english thats the problem. Believe me.

 

IB does passthrough ECN charges/rebates with the "Cost Plus" commission schedule.

Please list all the brokers (not prop shops) that have per share stock commissions lower than IB.

I already know that futures traders can get lower commissions from multiple other futures brokers.

 

IB's SEC 606 order routing report does list "Interactive Brokers ATS" with 2.5% of orders as a NASDAQ venue. It is not listed as an NYSE venue, but would have to be under 2.2% of orders.

I don't see having 2.5% or less of stock order flow being routed to "Interactive Brokers ATS" as a major issue.

 

Thanks for noting that. Does IB ATS = TH for this purpose?

 

The answer is maybe, as there are also other "Liquidity Providers" that an order can be traded against.

"Liquidity Provider Relationships: IB has entered arrangements with certain institutions under
which such institutions may send orders to IB on a “not held” basis. These orders are held within the
IB system and are not displayed in the national market. If another IB customer order could be
immediately executed against such an order held in the IB system (at the national best bid or offer), the
orders may be crossed and the execution reported to the tape. This arrangement provides extra
liquidity for some IB customer orders and leads to faster executions at NBBO (since the orders do not
have to be sent to an exchange or ECN to be executed but can be executed within the IB system). IB
may receive payment in the form of commissions or otherwise from the liquidity providers for these
executions."

Def or some other IB rep would have to give the full and proper answer.

 

jeb9999, here's a question I cannot find an answer to:

Why does Timber Hill appear on IB's 606 disclosure reports through June 2007 as regularly picking up around 15% of all IB non-directed market orders; then beginning with the September 2007 report, Timber Hill no longer appears on the 606?

http://www.interactivebrokers.com/en/general/about/brokerDealerReports.php

What happened between June and September 2007 with regard to TH picking up IB non-directed orders?

def, how does this all fit with your statement that IB does not internalize?

from the June 2007 IB 606:

Market Centers Receiving Significant Percentage of Non-Directed Orders

1. NYSE:
Percentage of total non-directed orders…….. 93.5%
Percentage of non-directed market orders….. 33.8%
Percentage of non-directed limit orders…..… 95%
Percentage of non-directed other orders…..… 85.3%

2. INET:
Percentage of total non-directed orders…….. 4.3%
Percentage of non-directed market orders….. 17.2%
Percentage of non-directed limit orders…….. 3.5%
Percentage of non-directed other orders…….. 11.7%

3. Knight:
Percentage of total non-directed orders…….. .7%
Percentage of non-directed market orders….. 21.9%
Percentage of non-directed limit orders…….. .5%
Percentage of non-directed other orders…….. .9%

4. Timber Hill LLC:
Percentage of total non-directed orders…….. .6%
Percentage of non-directed market orders….. 15.9%
Percentage of non-directed limit orders…….. .4%
Percentage of non-directed other orders…….. 1.1%

5. Archipelago:
Percentage of total non-directed orders…….. .6%
Percentage of non-directed market orders….. 6.8%
Percentage of non-directed limit orders…….. .5%
Percentage of non-directed other orders…….. .6%

6. ISE Stock Exchange:
Percentage of total non-directed orders…….. .2%
Percentage of non-directed market orders….. 3.6%
Percentage of non-directed limit orders…….. .2%
Percentage of non-directed other orders…….. .2

 

Didn't they say a while ago that they used to use Timber Hill but no longer do?