Know for sure the specialist will play with your market order. Suppose XYZ is bid 15.75, you place market order, he takes 100 at 15.75, drops the bid to 15.70, takes 900 and then moves bid back to 15.75. Happened to me a couple times, so now I almost always use limits with NYSE.
Skeptic, They say, "If your order is eligible for automatic execution . . .". Your's probably wasn't at the NYSE bid. But when the bid was dropped, TMBR picked it up and gave you a price at least as good as you could get anywhere else. But face it. Individuals have no way to actually check all of this. You either trust your broker and their compliance department to keep things working right or you don't. Personally, I trust IB.
Frankly I disagree with your interpretation. The order is either eligible or not, there is no phrase like "When your order becomes eligible..." in the description. If the order is not eligible for automatic execution - fine with me. They should send it to NYSE and forget about it. And if it is elegible - they promise instanteneous execution - "Instantaneous" means immediately when the order is submitted, not when it later becomes profitable for them to give me the fill.
Think it through. Say the bid is 15.35. TMBR is willing to buy at 15.34. Your order is to sell at 15.35 and is routed to NYSE. The bid drops to 15.30 before your order can be executed. You want them to keep your order at NYSE or pull it back and give you a better execution?
I wish it was the case, unfortunately this is not what happened. The market was 15.35X15.36. My order to sell was a market order. They routed it to NYSE. I did not get 15.35, "orders ahead" I quess which is fine. A print goes off at 15.35 and the bid drops to 15.30, the market becomes 15.30X15.36 TMBR pulls my order and gives me 15.30 fill. The next few prints go off at 15.33 and 15.34. The specialist is crossing orders in the middle. If TMBR did not pull my order I would have likely gotten one of those prints at a better price. If this is not order manipulation I do not know what is.
You're probably right in this case that you would have gotten a better fill, although maintaining your sell order would have been additional downward pressure on prices. But at the moment your order was pulled and executed the bid was 15.30. TMBR didn't know that the specialist was going to move the price up after your fill. It's also possible that there was a limit sell, all or none, at 15.33. This would not be displayed. Along comes a market buy which matches the all or none limit. Guess what. You see an execution above the bid, only it was a buy, not a sell. My point is, one piece of data is all you've got. As others have pointed out, the majority of time it's clear that TMBR is comparable to the best you can get elsewhere and occassionally better. At times, however, quick action in the market may make it appear that there was a slight disadvantage. Or then again, maybe they are taking advantage of us.
skeptic, jrwiener and carl erikson got it right. TMBR is just part of the SMART algorithm. You sent an order to sell and the system gave you the fastest fill it could find. It just so happened that TMBR was a 30 bid and the specialist didnt' fill your order at 35. If the market continued to drop, you would have been happy with the fill. You've been getting executions via TMBR for quite a while. 99/100 times you get instant fills. Thus if IB was playing games with your order, the statistics would show of many others complaining about the fills. Have any of you tried trading into a fast moving market and got a fill from TMBR that you would not have had from the specialist? I am sure this is happening and when it does, none seems to be rushing to the boards and starting threads with the topic "IS TMBR GIVING AWAY MONEY" In short, it works both ways - and I suspect more often than not, beneficial to the client.
def, Thanks for your response, I stated many times in this thread that I had a lot of great fills from TMBR and I did wonder whether they were giving money away on quite a few occasions. Nevertheless you avoided the main point of my question. IB claims instantaneous TMBR execution at as good or better price as any price available in the national market system. "your order will get executed immediately, with no delay or chance of the market price moving away from your order before it is executed". This obviously did not happen in my case. The execution was indeed TMBR, but it was neither instantaneous, nor at the bid price (available when I submitted the order and for the next 10-15 seconds). If you cannot deliver, why promise it?