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Phil:
I use the PATS interface which uses the exact same methodology as IB. I
agree with you unequivocally. Real money experience points to it being no
worse a procedure, and very often a better procedure for execution of stops.
----- Original Message -----
From: Earl Adamy <eadamy@xxxxxxxxxx>
To: RealTraders <realtraders@xxxxxxxxxxx>
Sent: Saturday, December 16, 2000 11:13 AM
Subject: Re: [RT] Interactive Brokers - stops
> 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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> >
> >
> >
> >
>
>
>
>
>
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>
>
>
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