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Non-Tech : Interactive Brokers / Timberhill
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To: Dan Duchardt who wrote (840)12/8/2000 11:38:37 PM
From: Dan Duchardt  Read Replies (1) of 9012
 
A note from IB:

In response to the recent discussion regarding option order routing, I received an email from an IB representative clarifying their position.

Dan,

Thank you very much for sharing your observation w/ us. The anomaly you mention can be explained as follows. When BE makes the decision as to where to route an order it "looks" at the market data of all the exchanges listing that option
where the "AUTOEX SYSTEM" is turned on. If the market data we receive from OPRA (Option Price Reporting Authority)
does not have the "autoex eligible" flag turned on, we disqualify that exchange. We do so because if the autoex is off, the specialist handles the orders manually - in the past we have had difficulty canceling orders handled manually. In other words, we do this in the effort to provide truly Best Execution. In the case you mentioned, we verified that AMEX did not have the AutoEx flag turned on. IB is contacting the Specialist at AMEX in hope to understand what went on. Also, on the Website we will include the language explaining the treatment of Auto-Ex flag.

Hopefully we will see the day when firm pricing and automatic executions against published quotes are mandatory on all the options exchanges.

Dan
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