EXPANDED OFFERING
Zero Spread for Institutional Orders
Interactive Brokers' clients executed over 3 million trades per day1 during Q2 2021. We believe our institutional clients would benefit greatly from interacting with this liquidity.
As you know there is great controversy about payment for order-flow. Brokers, who charge zero commissions, sell their orders to High Frequency Traders who execute these orders at slightly better prices than the NBBO. But these execution prices are still advantageous enough for them to be able to pay the brokers, maintain their operations, and make a profit that sums to billions. In the first quarter, nearly 50% of all stock trades2 were executed off the exchanges, resulting in less liquidity and wider markets for institutional traders.
At Interactive Brokers we charge a commission averaging just under $0.002 per share3 and seek to execute our orders at the best price our order-execution system can find in various dark pools and the exchanges. Traders who do not need immediate execution and are willing to rest mid-point pegged orders in our ATS can effectively reduce the bid/offer spread to zero both for themselves and for the SmartRouted orders we cross with their resting order.
Join them - both your institution and other IBKR clients would benefit greatly and equally!
IBKR hosts resting orders on our ATS, shielding our clients' intentions while achieving best price execution. We have incorporated anti-gaming logic into our SmartRouter to prevent predatory traders from probing the IBKR ATS to detect large resting orders. In addition, we do not trade against our clients' orders.
IBKR ATS accepts Accumulate/Distribute, Relative (a.k.a. Pegged-to-Primary), Pegged-to-Market, Pegged-to-Midpoint, Scale and non-marketable Limit orders. All order types (other than midpoint peg orders) provide dynamic adjustment so that a buy order is always at least one tick below the NBO, and a sell order is always at least one tick above the NBB. Midpoint peg orders are always executed at the midpoint of the NBBO. In addition, the GTD (Good-til-Date/Time) feature lets you select an expiration date and time up until which an order will stay active.
As an IBKR client, you can interact with our SmartRouted order flow by directing your order to the IBKR ATS. Simply click "Advanced" on the TWS Order Entry panel and select IBKR ATS as your destination. If you are looking to connect with the IBKR ATS using an API, contact our API Team at api@ibkr.com to learn more.
We look forward to helping you realize zero spread executions.
