After getting a partial fill on AMEX (the only exchange which handles SANM options), I lost my place in line, and someone else came before me for the next fill. That did not make sense to me. I contacted IB and complained about AMEX, but this is what IB responded to me: "Dear Trader, Yes I have verified this with both the AMEX and our programmers. Because the order was SMART routed our system re-evaluated the order status and re-routed. Going forward in order to prevent this, you can directly route the order to the exchange it's self." Re-evaluation??? If you're started to get your order filled, why is there any need for further evaluation??
The problem Justask specified above is mine, and I prepared the above message which Justask sent. I trade tons of options with IB, and was never aware of this problem till now. This is something really serious, as according to IB, when you get a partial fill for your order, your order "runs away" from the exchange you are getting filled out!! Why in the world would IB want to do such a thing?
It doesn't make sense to me either if there's only one exchange that trades the security. But it makes perfect sense in other cases. For example, you want to buy 1000 shares of a stock at 5.00. ECN A is showing 20 bid @ 4.95 / 20 ask @ 5.05 ECN B is showing 5 bid @ 4.90 / 5 ask @ 5.10 So IB routes you to ECN A since it would seem most likely to be able to fill your order. Now let's say to got filled on 500 of your 1000 shares. The ECN data has changed and now shows ECN A 5 bid @ 5.00 / 15 ask @ 5.05 ECN B 5 bid @ 4.90 / 10 ask @ 5.01 Why would IB keep your partially executed order at ECN A? It now appears that ECN B has the best change of filling your order. Perhaps you would be better off staying at ECN A, but perhaps not. With SMART routing you're somewhat playing the odds. Some times you win and some times you lose.