My experience with these 'liquidity providers' is that they are huge rip-off artists. IB service certainly stinks. i was on the floor for 20+ years also. So what? These providers are NOT going do you you any favors. They a re out for every last penny they can squeeze from customers. Mark
always trade at the actual bid or ask...I always get filled when I trade at a limit price on the bid or ask...why mess with the other?...should trade with www.optionsxpress.com
One thing that hasn't been mentioned, make sure your are trading HIGHLY liquid stocks or indicies. If there is a lot of volume you should get filled at or within a nickel of mid. The other thing to do as MTE said is leg in which can be a bane or blessing. Sometimes very last minute of the day I'll get filled or on opening, again you can't compare paper fills to the real thing. I know TOS says to always enter as a spread and for beginners it is best however with patience and practice you can get better fills by legging in using some TA.
No one is going to shop around retail orders nor would they need to be shopped. Look at the NBBO and consider legging it. I was on three different floors for 20 years too, big deal.
You will have to experiment for a while with whatever underlyings you are trading, I think. There is a whole lot of ground between "get the mid price or walk" and "pay the whole spread," so you will need to figure out what price is usually reasonable to ask for. Once you know your underlying, you will get an idea how much to "give up." Then you will have some idea which trades are a reasonable compromise for you and which should be passed up. Every day is different. If you want to enlighten us: what kind of underlyings are you trading? Liquidity is very important.
Oh, and also, if you can let us know moneyness and times to expiration, maybe some of the old timers here will have suggestions.
I would strongly recommend against increasenow's idea of just paying the ask when buying or settling for the bid when selling. You will almost always pay more than you need to, which wastes your hard earned money. The simple solution is to do the following: When buying, start by bidding the midpoint (there is no point in trying to improve on that, but it does happen...I have actually had a fill at 5 cents better than that for small orders in very liquid issues, but that happens rarely). Wait a few minutes. If nothing happens, then up your price by 5 cents (or perhaps a penny for cheap options or very liquid options such as AAPL or SPY). Wait patiently again for a few minutes, and increase your price slowly until filled or you are unhappy with the price. If the price is unacceptable, then stop. It's that simple. If you follow that practice, you will get filled a modest percentage of the time at the midpoint, and usually within 5-10 cents of the midpoint, and you will get a reasonable price almost all the time.
Doesn't it depend on liquidity? I am often filled at the midpoint on near-mo and 2-mo RUT spread trades. But I have rarely been filled at midpoint on same types of trades using NDX.
drcha, More liquidity helps, no question about it. Nevertheless, I had pretty good success getting filled on the NDX most of the time, and last week I was filled on the SPX at midpoint twice within seconds. Overall, the indexes have good liquidity. I'd worry more on individual stocks outside of the most popular issues (RIMM, AAPL, GOOG, and the like).