IDEALPRO is a consolidation of several "exchanges" (read counterparties or banks). We take the real time quotes each provides, blend them with client orders to create a virtual order book that presumes the ability to execute on the posted price. When a marketable order comes in, IB looks at the IDEALPRO virtual book and pairs off the inbound order against the best priced order on the other side, regardless of who is making the price. If the best price is from another IB client, we match the trade internally. Otherwise, we route the inbound order, or residual part, to the best "exchange", i.e. bank. It works just like SMART routing for other asset classes in this respect and is what allows clients to trade with each other as well as with liquidity providers. Non-marketable orders are added to the IDEALPRO internal book; they are not routed to the banks until they become marketable because all the liquidity providers work on a fill-or-kill basis. Even if they didn't, why expose the trade earlier than necessary? If IB routed non-marketable orders to bankA and bankB actually had a better quote sooner, the order would be executed more slowly than it should. To date, we have not noticed any pattern of latency from any single provider so we have not needed to consider the pattern of response times in our routing decisions. This may change given the recent problem with delayed reporting.
That pretty much says it all. IB was uniquely in the position to detect (and potentially fix) the problem since it was between them and the bank yet they don't think they have an obligation to proactively detect and fix?
IB's key comment is --> "...This may change given the recent problem with delayed reporting...." IMHO, that says its not an isolated problem. Go get a lawyer.
Even if they did in this instance and made a phone call to Deutsche Bank, how would that have materially changed the situation? Perhaps sped things up by a few minutes. So, instead of 37 min delay, a 25 minute? The problem with the late report resides with DB. Lets' keep in mind that at the time of the cancel, the order was marketable. This happened to me once with Lind Waldock. I recieved a too late to cancel report 20 mins later in the E-mini S&P. That came from the CME. I didn't lose money, actually made some. But the point is the CME was to blame, not Lind. And Lind didn't have a system that tells the trader that the cancel out was confirmed. I thought it was because my margin didn't increase by the amount a filled order would have indicated. I obviously didn't call Lind to status the order because, well, I didn't know there was a problem. Same in this case, think of Deutsche bank as the exchange. It's DB's responsibility to report confirms in a timely manner. Even if IB enacts a policy where their software flags an order which hasn't confirmed in under a minute, if DB's system (the counter party) can't status the order, what then can be done? The trader still has to wait until DB can resolve the issue which can take many minutes. The fact that IB's TWS gives a "Pink" indication that a cancel out is not confirmed is a very big leg up for the trader. This gives the trader the position of possibly indemnifying themself against a loss due to an unresaonable delay in order status. I've had a "light blue" once and called IB. The matter was resolved quickly and only needed an explanation.
Actually, the key phrase is: "To date, we have not noticed any pattern of latency from any single provider so we have not needed to consider the pattern of response times in our routing decisions." One sentence earlier. Perhaps you missed it while thumbing through Martindale's.
I have significant experience with pink orders as well. I will almost always call immediately and IB will call the exchange and "find it". This is almost always successful, but sometimes you just have to wait til the overnight to see if you have a position or not. The statement "manage your risk accordingly" is about as good as they can do. Some of you guys don't seem to accept this, but it's a fact of having technology running things. There isn't someone sitting there all the time watching all the orders and getting on the horn when something somewhere gets bogged down. Calling in pink orders not only gives you an answer most of the time, but also alerts IB to potential issues that may be affecting others. Pink orders are either lost at the exchange or lost between the exchange and IB. While I hate getting a pink order, at least I know it's something I have to stop and deal with vs. getting a bogus confirmation.
dunbar said: "The fact that IB's TWS gives a "Pink" indication that a cancel out is not confirmed is a very big leg up for the trader." True enough, but the order should also stay pink until a resolution, which IBJ seems to be hedging against in his explanation to aainthebeltway. In that post, IBJ seemed to emphasize that something he called rule 1 prevailed, meaning that a customer could get filled anytime whether the order is still present in it's pink form or not. If an order has not been cancelled, it should stay on the screen until a position change is indicated. That only seems fair.
Was this whole thing for $100? Even I , a reknowned chisler and cheapskate , would not have wasted so much time for that.