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In a message dated 6/22/00 7:48:46 PM Central Daylight Time,
drwar@xxxxxxxxxxxx writes:
<< So then when looking for a new broker what order routing system should we
be
looking for to get the best fills? Or does it matter ? I am looking to trade
short
time frames intraday.
>>
***** What online system to chose and brokerage to open with is a good
question and there is no one correct answer. Many different traders on this
list value one thing over another, or visa versa, and thus have selected
different brokers.
***** For speed and commission cost, I think Interactive Brokers is probably
at the top. However, Interactive Brokers offers just barebone service and
support. They do not have other brokerage operations to lean on during
outages, thus you get a funnel effect for problem resolution or phone orders
if the system has problems. Disclosure: My clearing firm is an authorized
reseller of the IB TWS.
***** Many other brokerage firms offering online trading have other brokerage
operations to lean on for phone based service if the online trading system
goes down. An example other than my own operation would be Lind Waldock or
the LFG Division of Refco. LFG offers online trading via a system called
Leo. It connects to TOPS and was I believe the first firm to do so. Being
first means you get to make all the mistakes the first time and Leo and LFG
had some bouts of this which were well documented on this list and others.
>From the reports on this list and others now though it seems to be running
pretty well.
***** There are several firms that offer trading via a system from Rolfe &
Nolan. Mine is one of them. It is also a system that connects to Globex2 via
TOPS. Like LFG and other TOPS users, TOPS based systems are a little slower
than firms connect to the Frontal Interface or the FIX API. However, TOPS
offers brokerages a separate order entry and order management system apart
from their online system. Thus, when the online system goes down, a TOPS
based firm can manage and manipulate the order via a TOPS terminal and take
new customer orders by phone. Large TOPS users like LFG or my clearing firm,
ED&F Man International, have literally dozens and dozens of TOPS terminals
and experienced users. Thus, problem resolution is dispersed among the many
and there is no funnel effect trying to get an entire firm's order flow
through a handful of Globex2 terminals during an online system outage. And
all systems and firms have outages.
***** Firms connecting the FIX API can manipulate their orders by using a
Globex2 terminal, but experience a funnel effect. The CME has developed an
online order management tool, but have yet to deploy it. Firms will be able
to see their orders in Globex2 placed through the FIX API or TOPS. They will
be able to cancel the order only using this system. Perhaps later versions
will over more functionality.
**** The real question then is to figure out which you value more, speed or
service. I would argue the service is better on the TOPS based systems. I
would agree the speed is better on FIX API and Frontal Interface based firms.
In the not to distant future though nearly a lot more firms will be
accessing Globex2 by the FIX API, and then the decision gets back to the
interface functionality, the price and the service.
***** I have seen many of the systems in use, including IB TWS, Leo, Best,
etc. Only you will be able to figure out what is best for you. I hope this
helped.
Regards,
John J. Lothian
Disclosure: Futures trading involves financial risk, lots of it!
Disclosure: John J. Lothian is the President of the Electronic Trading
Division of The Price Futures Group, Inc., an Introducing Broker.
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