Are IB losing the plot?

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Old Feb 14, 2004, 1:03pm   #9
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What instrument(s) are you trading ? and have you checked how your stop orders are triggered as there are several ways that this is achieved with IB ?


Paul
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Old Feb 14, 2004, 1:29pm   #10
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I'm trading Nasdaq stocks & i've no checked how the stop loss is triggered.
how do i check this..

tonie
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Old Feb 14, 2004, 5:21pm   #11
 
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Try this!!!

JonnyT started this thread By default, TWS uses the double bid/ask method to trigger simulated stop, simulated stop-limit, and trailing stop orders for OTC stocks and U.S. options. Use the Trigger Configuration box to modify the trigger method for these order types. All other order types must use the last method.

To modify the stop trigger method (valid for OTC stocks and U.S. options ONLY)

Right-click on the market data line for a stop, stop-limit, or trailing stop order and select Trigger Method.

Select the trigger method to use for the current transaction.

Trigger Method
Description

Last
For a sell (buy) order to be triggered, one last price value must be less than (greater than) or equal to the trigger price.

Double last
For a sell (buy) order to be triggered, two consecutive last price values must be less than (greater than) the trigger price.

Double bid/ask
For a sell (buy) order to be triggered, two consecutive ask price (bid price) values must be less than (greater than) or equal to the trigger price.


Here is the Nasdaq specific bit as Stop Orders are not native...

Stop Orders

Description
A Stop order becomes a market order to buy or sell securities or commodities once the specified stop price is attained or penetrated. A Stop order is not guaranteed a specific execution price, and may execute significantly away from its stop price. A Sell Stop order is always placed below the current market price of the security or commodity. It is typically used to limit a loss or protect a profit on a long stock position. A Buy Stop order is always placed above the current market price. It is typically used to limit a loss or protect a profit on a short sale. Some exchanges natively accept and process Stop orders according to the standard industry definition of the term. For those exchanges that do not natively execute stop orders, IB simulates such stop orders with the following default triggers:

Sell Simulated Stop Orders become market orders when the last traded price is less than or equal to the stop price. Additional sell stop order protection is provided for NASDAQ stocks and US Equity Options which are only triggered after two offer prices are less than or equal to the stop price.

Buy Simulated Stop Orders become market orders when the last traded price is greater than or equal to the stop price. Additional buy stop order protection is provided for NASDAQ stocks and US Equity Options which are only triggered after two bid prices are greater than or equal to the stop price.

For US equity and options markets, stop orders will only be elected by prices posted during normal NYSE trading hours (9:30 a.m. to 4 p.m. New York Time, Monday to Friday). In addition for NYSE listed stock Best Execution stop orders, the order will not be elected until the NYSE displays a BBO.



Custom Stop order triggers may also be specified to override the default triggers. Single last price, two last prices, and two bid ask price triggers are available by highlighting any market data line and selecting "Trigger Method" from the right-click menu.
Note that if you modify the stop trigger method to use either the "last" or "double-last" method, for orders routed direct to an exchange the last price used will be the NBBO, not the last price on the specified exchange.

See the Products & Market Centers page for a listing of those Market Centers that accept native market orders, those Market Centers that accept simulated last price stop orders, and those Market Centers that accept simulated 2 price bid/offer stop orders.

For special notes and details on U.S. Futures Stop and Stop-limit orders, click here. Native stop orders sent to IDEM are only filled up to the quantity available at the exchange. Any unfilled stop order quantity will be Cancelled.


Examples
You have purchased 100 shares of XYZ for $50.00/share. You want to limit possible loss on this stock, so you create a stop order to sell 100 shares of XYZ with the stop price set to $46.00. If the price of your stock falls to $46.00 or below, your stop order is activated and a sell market order for 100 shares XYZ is transmitted.


HTH

JonnyT
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Old Feb 14, 2004, 6:04pm   #12
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Thanks for that, that explains it all it's because i'm still using the default method on TWS, so will log into it & change the configuration...thanks alot again

cheers

tonie
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Old Feb 14, 2004, 7:25pm   #13
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I dont want to offend any one who uses and is happy with IB, but if that's the way IB execute stops, then it's just short of criminal.

The regulations (SEC/NASD?) state that for NASDAQ stocks, the stop order is triggered when the specified price is QUOTED.

NYSE stops must be triggered when the specified price is TRADED.

There is a subtle difference. In my opinion a good broker will follow the regulations (although I do not believe they are obliged to do so - but not 100% on this) and treat customers orders with due diligence. The odds are against us as it is in this MINUS SUM game, the last thing we need is brokers fading our orders - which is what will be happening in Jonny's quoted example.
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Old Feb 14, 2004, 7:44pm   #14
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BBB,

IB offer you the option to trigger your stops in a number of ways including those you have mentioned.

I know you have an axe to grind with them but as you have never used them I dont understand why ?

I agree that there are probably better brokers out there but none offer the all round package IB do at the price they do and allow you to keep your account in GBP.

If we had converted our account to USD to get better service as PDT just 6 months ago we would have lost over £3000 in exchange rate losses.

Personally I, and I know many others, are happy with them. They are not perfect but there is very little suitable alternatives and when there is I am sure we will soon be aware of it.

Compared to other brokers I have used IB blow them away hands down in almost every aspect. I even did an analysis of fill times and prices compared to someone using DAE and they only once beat me on price and time to be filled.


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Old Feb 14, 2004, 8:09pm   #15
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Paul - Fair enough. I seem to stand corrected.

I will admit, the facility to hold the account in your base currency is excellent, and also admit, I have paid dearly in holding my funds in a US account.

Yes, I do have an axe to grind with IB. Why? A mate of mine lost £20k using them on a criminal fill a few years back. IB did fold in the end and admitted liability. It took 5 months though, with the threat of legal action. Who needs that? I have also come across some other unhappy users - mostly around their technical and customer support. I shouldn't let this bother me should I, as what happens to others has little affect on me. Hey I'm not perfect!

I strongly feel however that choice of broker is one of the most important decisions a trader will make. It doesn't matter how good your system is if you cant execute. I know you're an astute trader Paul, but I bet a load of others don't realise how important the broker is in this equation - especially when starting out. Going for the cheapest option is rarely the best (the same can be said of the most expensive of course ).

Anyway, you're happy with them, and I'm happy with my broker. We're both happy! (ok, I'm still sore about the $ loss)
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Old Feb 14, 2004, 10:55pm   #16
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BBB,

Fair point about your friends. I believe that things have improved since then but I know that history, however far back, does affect decision making. For example, I wont consider buying a Ford car based on bad experiences I had as far back as1988.

I can only speak for how I have found things but if things went wrong then I would also say so as I have recently done with regard to my current level II data supplier.



Paul
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