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Non-Tech : Interactive Brokers / Timberhill
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To: booters who wrote (906)12/15/2000 9:46:30 PM
From: Dominick  Read Replies (1) of 9012
 
IB is not by broker, but I saw this post on realtraders message board and I thought this might be of some interest.
This is a copy of a post from Earl Adamy:

Anyone using IB to trade should closely examine the manner in which they handle stop loss orders on futures and stocks - I no longer have the links but they do post the details on their web site. I used their TW for some 6-8 months several years ago for scalping the emini and they supported stops
when they were not supported on Globex. I subsequently closed the account when my emini trading activity dropped off, however I am once again doing a good bit of emini trading and was quite interested in their new Java applet.
In the course of my re-investigation of IB, I learned that the IB system continues to simulate Globex stops rather than use the now fully functional stops on Globex2.

What does this mean? Lets suppose you place your stop with IB at point which is likely to attract a lot of stops. My (non-IB) stop will be held on Globex2 queued for execution in order of receipt. Your IB stop will be sent to Globex as a (psuedo) market order when the IB receives notice (via quote stream) that the price has been hit on Globex. Bottom line is that your stop will go to the end of the queue and incur more slippage, particularly in fast markets. Customers who trade the emini with IB should be aware that slippage costs may far exceed the savings on low commissions.

Inquiries to IB regarding their plans to replace the simulated stop system with true Globex2 stop execution elicited the information that there are no plans to change the system.

Earl
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