When you receive it : -------------------------------------------------------------- Unreported Execution Dear IB Trader, The following execution is in the process of being entered into this account; buy/sell: B quantity: 000 symbol: XXXX price: 00.00 execution id: X0x0x0X -------------------------------------------------------------- Is when TH or IB... FUCK YOUR ASS
But that's not the topic of this thread -- it's about B/D internalization, where the counterparty is about as far from anonymous as you can get. And there's an infinite (literally) number of ways a B/D can take advantage of you in such a scenario. Here's an article I just saw linked to in these forums -- it deals with forex, which has many of the same issues as with equity internalization, but to a more severe degree: http://articles.latimes.com/print/2011/apr/03/business/la-fi-amateur-currency-trading-20110403
How is it a "conspiracy theory" when your company's own FAQ said that IB internalizes to TH, up until this thread mentioned it? And if IB doesn't internalize now, then when exactly did it stop? And what's to stop it from starting up again? And why don't you change the pricing structure to make direct routing as cheap as "Smart" D) routing? I was an IB client, until I realized that the pricing structure was designed to "strongly encourage" users to use "Smart" D) routing that allowed for internalization towards Timber Hill, rather than direct routing to a real exchange. Then I went elsewhere. Fortunately I have enough $ and volume to use intitutional brokerages. Unfortunately for them, most ET users do not. But there are a few boutique players (if I remember correctly) that don't make markets and therefore can't internalize; so yes, there are alternatives to IB.
Does your distinction for US equities imply that TH provides IB customer's liquidity on foreign market equities?
A couple of years ago TH did provide a dark pool of liquidity to IB for US equities and that is when the FAQ was created. TH no longer does that as I said and the FAQ was not brought down. Yes, you pointed that out and it but it should have been brought when our policy changed. It's a conspiracy because despite numerous statements from the firm saying one thing, you guys keep coming back saying something else without - and specifically w/o any proof. what's to start us from changing our policy? Actually nothing. However, our firm has a reputation and history of providing best execution to clients. If that changed, we'd risk losing a large part - including many large and significant institutions - as clients. Pricing, you can route where you want with the same commissions but not without SMART. This has nothing to do with internalization, it has all to do with significantly reducing - and I mean significantly - the order to execution ratio. If our pipes are clogged then all clients are effected. For your "boutique" players that don't make markets. Read their 606 report. Many are indeed selling and receiving payment for their order flow. Either way, the proof is in the pudding and the challenge remains for someone to do a side by side test of their brokers routing vs IB's SMART routing so we can see who gets the better fills. I do distinguish US equities because that is the market that keeps coming up and I want to specifically exclude FX because in FX we have a number of major institutions, which includes TH making markets. But even in FX, TH just places it's markets w/o any knowledge of client orders. For the post that points to an trade being placed in your account. I'm sure that was a trade bust or something of the sort placed into your account. I am certain it has nothing to do with TH.
This is a very destructive and counter-productive obsession with trying to control something for which you cannot. I have had a GS stock account and switched it to an IB Pro account. IB was better because they made more shares available to borrow short. If you have a strategy that you honestly believe is being gamed and sabotaged and manipulated by your clearing firm, please close down the account and put the remaining capital to better use in some other profession. I have never seen the 'blame game' in trading work. You are participating in the ultimate accountability game.
What seems "destructive and couterproductive" to me is your apparent ignorance of what internalization is or how much it can cost you and other market participants. This isn't about explicit sbotage/manipulation -- it doesn't need to be for internalization to be very costly, in aggregate.
Yet this statement explicitly says that IB internalizes on "Smart" D) orders: Is this one out of date too, def? It's from the Q1 2011 IB routing report....