would IB ever piggy back your trades?

Discussion in 'Retail Brokers' started by Bluegar3, Dec 22, 2007.

  1. if you have a profitable system would IB ever piggy back your trades or would they never risk such a thing?
     
  2. rwk

    rwk

    Does it matter? If I am buying, the very best thing that could happen is for someone else to plow in behind me. The same if I am going short.
     
  3. zdreg

    zdreg

    thx for a good laugh.
    (in any case there is no risk in reverse engineering)
     
  4. Anybody running a profitable trading business...
    Is usually highly specialized and experienced...
    And would have ZERO interest in random "trading systems".

    Like I've been coming here for 3 years...
    And have ZERO interest in what people are ** trying to trade **...
    But I occasionally get valuable regulatory information.

    IB runs one of the largest arbitrage operations in America...
    So the answer is 1000 times NO.

    But IB would likely manipulate your orders with SMART...
    And probably has dozens of sneaky ways to shave a penny here... and a penny there...
    All "technically" legal, of course.
    Or at least deniable as a "programming error"...
    Or at least just a $500,000 fine...
    Many years after they make an extra $50,000,000 a penny at a time.

    If you are sending market orders into SMART...
    Then you are REALLY paying at least DOUBLE the fees you think you are paying.

    The simple fact...
    That IB is routing Cutsomer orders to their IDEAL ECN...
    Is the fooking definition of "conflict of interest"...
    And should be illegal... but it's not... just business as usual.
     
  5. No. In fact, they're trading against you the majority of the time.
     
  6. Care to explain that for the ill-informed among us? You mean our orders never go to the exchange? Or you mean that they take the other side of our trades legitimately simply because they know that the majority lose? If so, what do they do when they find a trader who's making the right calls? Code his account so that they aren't taking the other side of his trades?

    EDIT: If you mean that they're taking the other side of our trades at the same price that we would have got had they routed to the exchange, simply because they know that the majority lose, then who cares? Why would anyone care? As long as they're not manipulating data, does it matter who takes the other side of your trades?
     
  7. Dog, would you mind expanding on that a bit? You don't mean in slippage, I assume? Or do you? I assume you mean other fees which affect higher volume traders who are taking liquidity away?

    How exactly am I paying twice as much by using SMART? (I use it but only because I was under the impression that it's the best option for my smaller lot trades).

    If you're really feeling generous, can you suggest how I could route my orders better for NASDAQ and NYSE?
     
  8. You have lost all credibility with this statement. Prove it atticus or I will call you a liar.
     
  9. I never stated it's a hindrance, in fact, I consider it an advantage for the IB client. IB is the largest option market maker and will often be on the other side of your ticket. There is a good reason why they will guarantee a fill on inter-market spreads and combinations. Consider it passive-payment for order flow.
     
  10. If you are sending market orders into SMART...
    Then you are REALLY paying at least DOUBLE the fees you think you are paying.


    HoundDog,

    Is this in the sense that if you direct your own order flow (and know what you're doing) for a market entry, you will get a more "timely" fill in so far as the price you wished to get filled at? How about the speed of execution with a SMART market order - better or worse than the "self-directed" method? I use IB and typically get a fill (even at busy times) in < 1 sec.
    Please understand I'm not some sort of apologist for IB. Just curious. I know that some of the higher end (= more expensive) retail brokers really trim their unwitting clients with this routing game.

    lj
     
    #10     Dec 22, 2007