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Non-Tech : Interactive Brokers / Timberhill -- Ignore unavailable to you. Want to Upgrade?

To: John Megert who wrote (994)	1/13/2001 4:46:06 PM
From: Dan Duchardt	Read Replies (3) \| Respond to of 9012

John, I think your are just reaping the benefit of ISLAND liquidity. ISLAND does not route to other market participants. When you send a marketable order to ISLAND, it cannot be represented to Nasdaq because that would lock the market. There was a time when ISLAND rejected all such orders, but a year or more ago they started accepting them and putting them on the book, just not sending them along to Nasdaq for inclusion in level1/level2. Even though they are only accessible to ISLAND users, ISLAND bids at the inside offer, and ISLAND offers at the inside bid tend to have a very short lifetime. If you watch these orders appear on your IB screen you will see they don't last long. I'm probably one of the guys taking you out if I get the chance. Dan

To: John Megert who wrote (994)	1/15/2001 3:58:31 PM
From: dli	Respond to of 9012

ISLD is a passive ECN, unlike REDI it won't actively work your order. You will only get filled if there's liquidity on the book or someone comes along to take your offer or hit your bid. ISLD used to reject marketable orders that would lock or cross the market until they changed their order handling rules this Fall. Now when you put marketable orders on ISLD, ISLD will display your order on LII at the bid 1/16 below the inside ask in case of a buy order and vice versa for a sale. If someone hits you, however, you get your limit price. So basically you're providing people with price improvements which also explains why you seem to have good success getting filled this way. However, when the market is going strongly against you trying to get out this way should be a lot more difficult than preferencing other market participants directly unless you're making very large concessions on price. Dave