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What is there to "think over"? Did you present evidence that IB staff was
wrong when they confirmed that IB's emini stops are not queued directly on
the Globex2 servers? Did you present evidence that the Globex2 execution
algorithm for orders at the same price is not first-in, first-executed? Did
I claim that once a stop area is hit, prices would never rally resulting in
better execution for orders holding a later position in the queue? Were the
relative advantages and/or disadvantages of using in-the-market stops
germaine to my warning? Does stop order handling in an end-to-end
electronic system have anything to do with stop order handling in pit
trading? Did I indicate that the use of native Globex2 stops has not on many
occasions incurred slippage, both negative and positive?
I think not. The crux of the information was an admonition that the IB
system does not use the Globex2 stop mechanism, that IB customer stop orders
at the same price are likely to be queued for execution behind native
Globex2 stop orders, that this information may not be known to IB traders
electing to use emini stops, and that the consequences could prove costly.
It is up to each trader to perform due diligence on their trading and order
systems and to determine suitability to their trading style. Obviously, the
stop handling is an issue for me or I would have already re-opened an
account with IB and cut my trading costs by five figures annually.
Earl
----- Original Message -----
From: "Phil Schuch" <lists@xxxxxxxxx>
To: <realtraders@xxxxxxxxxxx>
Sent: Saturday, December 16, 2000 3:11 AM
Subject: AW: [RT] Interactive Brokers - stops
> What do you want to tell us with your mail? Honestly said; I do not agree
> with you that the simulated stop orders are a disadvantage. We are
currently
> doing heavy trading at the CME through IB and the execution of stop orders
> are almost the same. A good part of the position mostly gets executed
better
> than the stop price. Working with stops in fast markets; you have a
> disadvantage anyway. I suppose you are familiar how stop orders gets
handled
> on the pit, as well the execution? Therefore; I would suggest you think
over
> the contents of your mail once more.
>
> Phil
>
>
>
>
>
> Von: Earl Adamy [mailto:eadamy@xxxxxxxxxx]
> Gesendet: Saturday, December 16, 2000 2:42 AM
> An: realtraders@xxxxxxxxxxx
> Betreff: [RT] Interactive Brokers - stops
>
>
> 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 attrace 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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>
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