Direct market access
- Thread starter NoMoWork
- Start date
DaveN
Member
As I understand this, for Options, it will be ThinkOrSwim (ToS) or IBKR Pro which will provide that Direct Market Access. The rest will be PFOF, or Payment for Order Flow. I assume this is what you are asking about. Those brokerages will let you specify routing or to use their smart routing to find the optimum exchange. On both IB and ToS, I've had orders fill partly in different exchanges. As a general rule, PFOF brokerages seem slow, and I get much better and faster fills with IB and ToS.
YMMV, as this is probably not noticeable in tight spread markets like SPY. I trade solely in the SPX and RUT options which have much wider spreads. I also generally use the Smart Routing features to route my orders.
There are some nuances like your routed order in PFOF has to be shown on the exchange but with a 100 msec delay for the PFOF firm to execute. (my details might be vague or incorrect here.) Not that I'm trading options on any kind of high-speed system, but with brokers like Tasty, Schwab, and others, it 'feels' like the prints have to tick into your limit order or through them before I get a fill. I don't have detailed side-by-side testing of this, but I have placed orders on both at the same time and made some empirical observations of my own. My fills, speed, and price improvement have always been better on IBKR or ToS.
YMMV, as this is probably not noticeable in tight spread markets like SPY. I trade solely in the SPX and RUT options which have much wider spreads. I also generally use the Smart Routing features to route my orders.
There are some nuances like your routed order in PFOF has to be shown on the exchange but with a 100 msec delay for the PFOF firm to execute. (my details might be vague or incorrect here.) Not that I'm trading options on any kind of high-speed system, but with brokers like Tasty, Schwab, and others, it 'feels' like the prints have to tick into your limit order or through them before I get a fill. I don't have detailed side-by-side testing of this, but I have placed orders on both at the same time and made some empirical observations of my own. My fills, speed, and price improvement have always been better on IBKR or ToS.