Does that mean NASDAQ route is a broadcast order? I think I read somewhere on IB site that the order would be routed to the most active MM or the one with size.
The NASDAQ route used to generate SNet Broadcast messages for non-marketable orders routed to it. After a recent SNet outage Nasdaq told IB to stop doing this because lots of IB customers who onviously didn't have a clue what they were doing (could it be because of a lack of documentation?) contributed to the problem by submitting such orders at the time. Currently the NASDAQ route only accepts marketable orders which afaik are only sent to MMs at the inside market. There is no way to preference specific MMs outside the NBBO and the NASDAQ route is definitely not a good idea to use in fast market conditions. Your best bet in a fast market is BEST_ECN or routing directly to an individual ECN. As for the resolution of the ARCA/REDI related problem with BEST_ECN I've posted IB's statement a few days ago that it is being worked with top priority.
...the NASDAQ route is definitely not a good idea to use in fast market conditions. Your best bet in a fast market is BEST_ECN or routing directly to an individual ECN. And that ladies and gentlemen is the nub of the problem, and why we are having all this interesting discussion. What do you do in a fast market when there is no ECN to route to?
In that case you're probably applying a scalping style too stocks that are too illiquid to be suited for it from an execution risk perspective. Plus this point about not being able to preference MMs out of market is going to be moot in two weeks anyway when SNet will be a thing of the past for NMS stocks.
In that case you're probably applying a scalping style too stocks that are too illiquid to be suited forit from an execution risk perspective. I don't see the connection here between liquidity and whether an ECN is going to be nearby on a sudden change in market direction. When you have to bail out of even a high liquidity stock, you want to be able to preference your order perhaps four or five levels down on the LEVEL II screen. If there is no ECN there, you may have to go even lower. Plus this point about not being able to preference MMs out of market is going to be moot in two weeks anyway when SNet will be a thing of the past for NMS stocks. Only if supersoes is put in place. But we've been through this before haven't we?
If you stick to liquid names there will practically always be an ECN available within four or five levels in a fast market.
Actually, this quote belongs to Rogan LaBier. It was originally posted word for word on his tools-of-the-trade website. Bill
And what if my trading style is not to trade the CSCOs and ORCLs of the world??? When I did my DD on IB VS MBT, I came to the following conclusion: If you trade more than 25 round trips a month and more than 300 shares per order on average, you should use MBT. If you trade 100-200 shares per order, IB is the way to go. I feel that you should improve your fills by 4-6 cents on average with MBT. This is my opinion, and I am sure many of you have other opinions. But, when it comes to risk management on lots of 300 shares or more, you just cannot compare IB to RealTick + MBT. The key points are: Routing Flexibility Software Stability Well-Staffed Live Trading Desk What can someone TRULY expect for a buck per 100? The cost of doing business is much greater than that. Heck, 1,000,000 shares a day would probably be just enough to pay def's salary <g> Bill
sniper, I disagree. I used to trade with a Realtick broker, and while I preferred the integrated quote and execution platform, I still use Realtick for my quotes/charts but execute through IB. My fills are about the same in terms of routing and speed as they were with the Realtick broker. The trick is simply setting up the IB page properly to execute your trades. With its hotkeys to boot, executions are a breeze (at least in my experience). True, there is not the same level of live help with IB as other full service brokers, but for the commissions and for those who don't need any hand holding it can't be beat.