Routing Orders (NASDAQ)

Discussion in 'Order Execution' started by dvs, Jun 2, 2003.

  1. dvs


    Where do you route most of your orders?


    Or do you use SMART orders?

    Why do you route them there? Is it because of:
    Speed of execution?
    Best available price?
    Or cost(rebate) of executing on that destination?

    Just trying to get an idea why people route certain places and which ones you prefer
  2. horseman


    Market orders are sent smart. I don't have to spend time finding the NBBO, some computer does it for me. Limit orders are sent to Island (very liquid). I watch the book all day. I can see my order posted and if I cancel, I can see it come off the book. I don't have to worry about whether my order line is changing to the correct color
  3. Just a note. Since the Bid-Ask spread is .01 , if you use ARCA(Pro-active) for market orders on REDI+ for example, your EDAT software will seek the the NBBO to execute market orders. If you trade 1000 shares or less in NASDAQ 100 stocks, you will be executed in less than 1 second most of the time.

    Market conditions have changed. Stock prices are lower, volatility is less than or used to be , ARCA is proactive ,so hot keys are not really necessary . You may be eligible get a rebate for posting on ECN's(ARCA,ISLD & INCA), so if a stock is running , it might make sense to post(and not take) and add liquidity to lower cost..

    Gene Weissman
    E-Brokerage, LLC
  4. schons


    If i'm trading a stock with high ISLAND volume, i'll use ISLAND alone.... it's execution speed is superior to anything out there.
  5. Taking Liq I can't imagine anything faster than IB's SMART route, cause when TMBR (IB) fills you internally it is incredibly fast.

    Next best, I agree ISLD is the fastest of the ECNs, although they all have their uses in certain situations. I have found SM to be fast also. Of course, if there is only one ECN on the inside you will want to route there. ARCA is useful for the routing feature Gene mentions..

    If you have "Auto" or "Smart" routing that divides the orders among the various ECNs that's good. (My one compaint in the world is that I don't have it). ARCA will do the same thing for you (on their end), but I have found that "parsing" that order in your software (ie using AUTO or SMART in your software) works quicker than ARCA routing.


    I used to use DATEK's AUTO ROUTING,
    MBTX from MB Trading,
    Now I use only SMART.
    They all work well