The OP was talking about the choice between manually legging a spread combination through multiple order ticket windows, or using an exchange supported ( and exchange order matching algo ) to do the dirty work for you. The exchange wins hands down every time, btw. And I have all the automation tricks and legging tradecraft developed in the pits. Go exchange supported every time if it is available. Seriously.
In the past, at least, there was still a difference for some spreads. I could set up two quote lines, one for Smart routing, one for Exchange Directed. The bid-ask would be much narrower on the Exchange Directed quote line. For Smart routing, IB would hold the spread on its servers until it could see that both sides could be filled. Now, this is a more general mechanism, because it allows spreads for which no native spreads are available. But it is inferior where exchange-native spreads are available. This may have changed (I no longer use IB).
Thanks for the responses. My futures spread knowledge begins and ends at some simple intra- and inter-commodity stuff in the grains. One of these days I'll dig into the energy complex. P.S. Thanks, Comintel for the intel on IB. I'll have to pay close attention next time I do a spread.
IB offers both "Smart" and "direct" spreads. The "direct" bid-ask is narrower. I never use "smart" and never pay attention to it.
So has anyone used IB for spreads? is there a way to invert the way IB quotes the spreads? for example looking at a CL Jun -Dec spread IB quotes it backward from the way the exchange quotes it...-1.01/-1.00 vs nymex 1.00/1.01 and it looks like IB does not accept stop orders on spreads? I am referring to Directed (or exchange traded) not Smart routing...
Actually, the correlation between Brent and WTI is not as high as one would think. Over a five year run it is 95%, but for the past two years it is about 83%. Point being, it is more of a divergence play than a true spread trade in terms of being properly hedged.
With spreads, sometimes you have to set an alarm on your charting package if you can ( in lieu of your execution platform ). Some of my clients even have that functionality forward an alert to their smartphones. I know that's not optimum, but it is one viable solution. The problem, of course, is that you still have to get to your execution platform and log in and enter an order, but it is what it is.
Just as a side note, I have a few clients I took on in the early spring who are currently transitioning to the live markets, so I would be able to get a few qualified and motivated traders into the upcoming training rotation if that is something you're serious about. I would be happy to have a conversation with you about what I do and your trading background, and would be pleased to send to you some background information about myself. If you do review my background, and you then tell me that you are truly serious about becoming a client, I would at that time forward to you some client contacts so that you can ask them some questions on an independent basis.