Interacive Brokers stop orders scam on continental stocks

[mel_pub]

Interacive Brokers stop orders scam on european stocks

First , I have to say that market orders are always sent to the best exchange, national or Chi-X (MTF), and the fill is always less than 1 second

Hower, i noticed that when I placed stop orders in SMART mode (default), they were executed as late as 20 (yes twenty ) seconds after the price (last) was crossed (many times), always at a disadvantage to me of about 5 cents. Each time the order were executed on Chi-X

But the beauty of this is that IB has found a way to rip you off making it look legal and in accordance with MiFID.Let's say you're long and put a sell stop at 15.23, it is executed internally using smart routing in less than one sec, IB is filled at say 15.21
Then... IB waits a few seconds, if the price has dropped further so that there's an opportunity, they buy back the shares at 15.18. And guess what ? You're affected the shares at 15.18...see it's on the tape!

I dont see any technical reason why when I (from home) send a market smart order it's filled instantly, and when it's a stop (stored at IB) it takes 20 seconds to get filed, always on chi-X, and always at a disadvantage to me.

The Customer service answered me something like ...you know..sometimes it takes time to route an order (Yeah sure! )...but if you route your stop to an exchange (directed order) it will work (= we're ripping off the noobs but you can avoid it by routing your orders wisely).

I'm talking about trades done on very calm periods of the day of course

It's easy money for IB, but not very fair, and way too obvious...

IB has a good routing system there, but use it against european customers. Sounds perfectly logical as a way to get the returns on a new investment (routing on european MTFs born a year ago) in programming and infrastrucure.

The availability of MTFs (only Chi-X for now) at IB is not such an advantage over the local competitors (still routing everything to national exchanges). Especially if you consider that the cost is still 0.1% and the .002 adding liquidy rebate is never passed to IB's customer because european exchanges are available only with BUNDLED pricing.

Anyway, If you trade stocks at IB on european exchanges or intend to, I suggest you to avoid SMART routing for stops

 

[nine]

Its also not even vaguely true.

Such allegations have been made in the sandpit (elitetrader) many times and when someone can be bothered working it through they've been proven to be either deliberate bs or misunderstanding on the part of the OP.

Do some searches over there if you want to find out what is really happening and how you should improve your approach. Or someone here who trades stocks might spend the time explaining it to you. Maybe.

 

[mel_pub]

I'm talking about european exchanges, on which MTFs routing was enabled only 1 year ago. Do you trade them ?

 

[Trader333]

Then... IB waits a few seconds, if the price has dropped further so that there's an opportunity, they buy back the shares at 15.18. And guess what ? You're affected the shares at 15.18...see it's on the tape!

I agree with nine. IB are not a bucket shop so it is not in their interest to do this. If it were true then I am certain I would have heard about it from numerous others but I haven't. Have you checked how your stop orders are configured to be triggered as this has a big impact on how long it takes to get orders filled ?

For IB to put resource into taking the other side of customer orders would be business suicide for them and at complete odds with their core function and service.


Paul

 

[mel_pub]

Yes I checked that stop were set to trigger on the Last price and not double last or bid/ask like on Nasdaq stocks.

I myself never had trouble trading at IB, before they introduced that SMART routing to European MTFs recently

Again Market/Limit orders work well and they are routed to the best place instantly, but stops are handled differently...

With the SAME settings for stops, when you route to national exchange, the stop is stored on the exchange, and triggers instantly, when you just set SMART, it is IBs obligation of means and not of results that goes into action, and that the only explanation they give.