Hi Guys, who really knows about ECNs ROUTING? what is the difference among all those ECNs? There are so many ECNs for free like: MASH, BRUT, MKXT, ATTN, ISLND, ....why Use ECN's like ARCA and REDI. Some people say they are fast. But how faster than the others? If there are 3 selling offers at the ask. one is REDI, the other is INCA and the other is a market maker. Each one with 1.000 shares. If I send a market BUY order for 3.000 shares. What would be the difference from using any of those free ECNs for ARCA and REDI. I know that ISLAND would be no good, since island only hits island. SuperSoes would only hit the market maker, right? I also know that REDI and ARCA would get me filled almost instantly, but they'll charge me fees. What about the other ECNs? Will I get filled fast? how fast? I appreciate your opinions
most of the ecns are very fast.. mkxt is a little slow on confirms sometimes though.. MASH is a market maker by the way.. alot depends on your broker.. do they have a direct line to all ecns or are they hitting them with selectnet?.. but as a rule of thumb, if you are going to be trading size, you dont want to generate 5 transactions to hit all of the participants necessary to fill your order.. so its best (and cheaper) to use redi or arca to sweep the book.. but in the example you just sited.. if you wanted to avoid the fees.. you could just place your order on island and the offers on redi and arca would hit you.. (remember the smart logic works for the other guys too).. -qwik
Qwik, Interesting point. In theory I understand what you are saying but I am not sure if it is true, and if it is I have never been able to confirm how/when this would happen with Arca or Redi (and I have tried). In Rickboys example, considering the other matching offer was already in when Rickboys bid would be entered, then we can assume that Arca/Redi had already gone through its algorithm for this sell order. If the order was marketable it would have looked for internal match, then Direct ECN match, then SNET ECN match, then deliver the rest to SuperSOES. In this case, the order is not marketable so Arca/Redi would post the sell order as an offer in its book and display it in the L2 quote as indicated in your example. At that point an incoming Arca/Redi buy order at the offer price or higher would certainly match. However in your example, you indicated that an incoming ISLD buy order (Rickboys) at or above the offer price would, in effect, be hit by Arca/Redi in an attempt to fill the pre-existing Arca/Redi sell order at the offer price. Again, I have never been able to verify that Arca/Redi takes non-marketable orders and "resends" them via their routing algorithm on some sort of periodic systematic basis if matching orders subsequently come in via non-internal means (ie other ecns). If you have been able to verify this then please share any details you have! Thanks.
DAT, question : if you use ARCA/REDI to take an offer or hit a bid,will it trade with other ECN's(either direct or non-direct) hidden orders?
To which I do not know the answer. My guess is no but I will ask some people I know who may. I may be wrong on this as well but ISLD is the only ECN I know of that has hidden orders.
If you want speed go Island...but there are some things you can do with Arca and Redi that you can't do w/ ISLD such as... stops...trailing stops...change order(very important if you're paying per transaction) i hate when i go to isld...get partialed...then have to cancel and re-enter...i just made two transaction ...in arca you can just change your bid or offer even if you already got partialed
DAT, i'm pretty sure you can put hidden orders on INCA and ARCA,as well as ISLD; i'm not sure about the other ECN's...let me know when you find out if ARCA and REDI trade with other ECN's hidden orders. Thanks.
I have never come across anything in RealTick that let's me hide my orders with ARCA and you would think that if any one could it would be RealTick users. I can do reserve orders that let me hide my true total volume but that is obviously not a hidden order. Come to think of it, I cannot do ISLD hidden orders on my Realtick either, though I can do them with PointDirex.
DAT, you mention "I can do reserve orders that let me hide my true total volume but that is obviously not a hidden order". I am a little confused with this statement.I thought if you can hide your size displayed on Level 2 and the particular ECN's book, then that would be a hidden order.So what would be the difference with the ARCA reserve order feature versus a hidden order. To me, it seems like the same thing.
With the Reserve order, only the "displayed" volume is actually "live" at any given time. WIth a Hidden order it is all live, its just that no one else can see it. EG A Sell ARCA Reserve 2000 share order with a 300 share display would result in 300 shares being offered, and as soon as it was filled another 300 would then be sent out etc. Thus if a bid of 2000 shares came in at a matching price and there were other shares offered at that price besides the 2000 reserve, the remaining shares in reserve would not have time priority over other (later) shares offered since they were not technically "live". Whereas a 2000 share hidden order, assuming it was the next order in time priority at that price, would get a total match at an incoming 2000 share bid.