just a simple quick explanation if possible, when submitting an order for a nasdaq stock through IB Best, if its outside of the current mkt i see it go to Island and i guess that is where its represented, now how often does IB try to reroute the order in case a mkt maker steps up to the curent bid or ask so that my order would get filled? Or if the order is outside the curent market does it just sit on island until its hit on island>>? thnx guys.
i guess my question was that if the mkt is 25-25.04 and i had a limit out there to buy at 24.95, my order sits on island, so if the mkt starts dropping and the mkt is 24.95 - 24.96 and an offer steps down to 24.95 and its a mkt maker and he is not hitting island, will IB try to hit him via supersoes or is my order just gonna sit there on island until mkt maker hits it or someone else via via island? thnx for the explanation,
the market maker cannot lock the market - if he/she wants to sell at 24.95, they must take out your bid before posting low offer - no need for IB to do re-routing routines. Bottom line - if the market maker wants to sell at 24.95, why wouldn't he hit your bid? of course he/she will
thank you mbg, now i get it. i kept thinking mkt maker would sit there for a moment, but yeah totaly forgot they cant lock the mkt. thnx for help. This is what ET should be about, not bitchin and moaning about who's better than who. once again thnx.
IB will reroute your order - they will at least look in an <n seconds> interval when your order has become at / within NBBO and eventually re-route the order if e.g.: you are 24.95 bid at island, island has 24.97 offer, however, INCA has 24.95 offer. If you fall into an update cycle, you will be re-routed & filled.
hmm... in my experience it's the other way around: ISLD cannot lock the market, but nothing prevents MM-s locking against an ECN. so if an MM steps down the offer, ISLD will actually back away to avoid the lock. i've seen this happen several times. - jaan
@jaan locking the market is technically possible so far (AFAIK), however, if you do it often, the SEC/NASD will "take care of you". i think this is what happened to IB lately. the brokers, ECNs and MMs are therefore required to implement a sort of "locking/crossing prevention". The MMs will take care of the issue themselves to get peace from NASD, but if they want out of something, i can imagine this is more important. however, i am not 100% sure of all this.
On a related note, check out this page illustrating how orders are routed at IB: http://www.interactivebrokers.com/html/webhelp/TWS_Reference_Information/LimitOrderFlow.htm
well then i geuss teh question is how often does IBs Best send out the order to either hit ecn or a market maker once a set up is favorable, anyone know>?