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Point 21 seems to refer to their book, which displays customer orders
anonymously.
"Further, the IB trading system is designed to prevent the disclosure
of Customer orders to any person, including Group personnel, prior to
the transmission of these orders to the exchange or market center for
execution, and prior to display to IB customers on the Interactive
Brokers Book. For the purpose of facilitating execution, the Interactive
Brokers Book displays competitive bids and offers with their associated
sizes as they appear on the Interactive Brokers Book to IB customers and
Group personnel on the same basis." (from Addendum 5)
Point 22 says (I think) that orders generated by their trading systems
are handled separately and apparantly without regard to regular customer
orders, as if the two operations were entirely blind to eachother:
"The Group trading systems that generate, and are responsible for,
entering the proprietary orders of the Group do not view, and their
input is independent from, Customer orders prior to the transmission of
such Customer orders to the exchange or market center for execution, and
prior to their display to IB Customers on the Interactive Brokers Book."
(from Addendum 5)
Addendum 5 --
http://www.interactivebrokers.com/html/retailAccount/sampleForms/custAgree.html
Regards,
Monte
Michael Suesserott wrote:
>
> Hi all,
>
> the following is some small print from the Interactive Brokers account
> opening forms:
>
> --------------------------
> "21. Displaying Orders: Customer authorizes IB to disclose Customer orders
> to others, including IB's affiliates and customers; to disseminate quotes;
> and to facilitate the execution of such orders. In this regard, Customer is
> subject to ADDENDUM 5, "Customer Information Policies and Procedures."
> Customer represents that Customer has read and understands the information
> contained in ADDENDUM 5."
>
> "22. Proprietary Trading: Customer authorizes IB to engage in proprietary
> trading, and to execute the proprietary trades of its affiliates, even
> though IB may simultaneously hold unexecuted Customer orders for the same
> products which could be executed at the same price. In this regard, Customer
> represents that Customer has read and understood ADDENDUM 5, "Customer
> Information Policies and Procedures."
> --------------------------
>
> Aren't these quite unusual provisions, allowing IB to disclose to others,
> and even to front run, the customers' orders?
>
> Regards,
>
> Michael Suesserott
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