Are IB losing the plot?

[JonnyT]

Over the past months/years I have had nothing but praise fro www.interactivebrokers.com

I have recommended them many times here and on other boards.

As it stands now I would advise to not use them.

I have recently had problems when trading through the API where native orders on an exchange (Globex in my case) have been cancelled when a modify order has been sent.

i.e. the original order has been cancelled but the replacement not submitted.

IB have told me that the status in TWS suggests that the modified order has not been received so I find in absolutely ridiculous that an existing native exchange order can be cancelled without IB receiving anything.

As it stands I used to absolutely love IB but given the recent very poor service and blatent fobbing off it looks like the future is TradeStation.

My legal team will be pursing losses incurred due to what was problems with IBs systems unless IB see sence in the next few days.

JonnyT

 

[Trader333]

So it is the API that you are unhappy with, if you dont use the API and only use the TWS platform would you still say the same ?

Bear in mind that using TS means you will have to transfer and convert your account into USD and then go through a whole lot of issues with converting it all back which is never cheap.

Do IB guarantee that using their API as an alternative to placing orders manually is guaranteed ? If not then I am sure you will get no-where.


Paul

 

[Crossroads]

Do IB guarantee that using their API as an alternative to placing orders manually is guaranteed ? If not then I am sure you will get no-where.

Do they even guarantee manually placed orders? I thought the whole point of going through all those exams at the time you open your account was to say that you fully understand that IB guarantee absolutely nothing and any money you lose as a result of their systems not working is your problem not theirs.

I wish you luck.

__________
Xroads

 

[scpope]

Jonnyt,

I have been looking at thew API following your rec in another thread. I don't know much about tradestation as I use Metastock for system testing and shortlisting. Will tradestation allow you to automate your trading as per IB api? If not, how are you going to run your successful automated trading system?

 

[jmreeve]

IB would be right to argue that it is a problem with your software which is not handling the order submission and return status messages thoroughly.

If the TWS status messages confirmed the modify when it had not in fact happened then you would have a case. However, from what you have said, the problem is that your software is not correctly tracking the order state.

If you do not receive confirmation of a request after a period then your code should raise a timeout event and either alert you to the problem so you can deal with it manually or automatically handle the problem.

 

[JonnyT]

How can IB be right?

They received the modified order because they cancelled the existing one. That is fact.

Agreed my code needs to handle this occurrance (Shouldn't really have to do this as its covering bugs in IBs systems) but IB received the order and did no process it correctly.

JonnyT

 

[jmreeve]

I agree that something has gone wrong somewhere.

It could be that IB have cancelled the original order, sent a new
order to the exchange to replace it and the exchange has not sent an acknowledge.
Or it could be there is a problem with the IB system either not replacing the order or not handling the exchange response.

In either case, communications errors will happen from time to time and software must be designed to cope with them.

Is this problem a frequent occurance or something that has happened just once or twice?

Has this problem only occured on Globex? If so this might point
to the exchange as the source of the problem. Globex has not been entirely free of technical problems in the last year.

 

[tonie]

Problems with IB.........STOP LOSS

Recently i'v had instances where i have set a stop-loss order & then found it had not been triggered, then having to manually stop out of my position. As i'm new to this game it might be the way i'm placing the stop loss.
if im Long $40.00 & want a stop loss at $39.90 do i select Sell > STP > 39.90 > Transmit & this shoul stop me out if the prices breaches 39.90.I've waited for about 15 secs after the price went through & it did not trigger....this would be visa versa for a short position Buy > STP > 40.10 > Transmit.

Am i doing something wrong, am i enetring the order incorrectly, should i wait longer for after the price stop is reached for the order to be entered....

As anybody else had the same problems....

 

[Trader333]

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

 

[tonie]

I'm trading Nasdaq stocks & i've no checked how the stop loss is triggered.
how do i check this..

tonie

 

[JonnyT]

Try this!!!

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

 

[tonie]

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

 

[BBB]

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.

 

[Trader333]

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.


Paul

 

[BBB]

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)

 

[Trader333]

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

 

[BBB]

Do you know of any other brokers that provide accounts in different currencies? The only ones I know are futures brokers, not NASDAQ brokers.

 

[Trader333]

Unfortunately not for the Nasdaq which is what I trade.


Paul

 

[TheBramble]

Paul, one of the reasons you rate IB is the ability to hold your trading capital in GBP with them.

I guess if you're not going to hedge a USD currency holding this makes a lot of sense. But that option aside, how specifically does the GBP a/c work with IB?

Does the currency conversion get applied at each open/close of a trade - i.e. dynamically, at the time of the trade?

 

[peto]

Bramble:
The gbp balance is held intact as the margin for a dollar trade, and will show the same after a round turn. The profit or loss from that trade is recorded and held in usd's; until you choose to convert it back to gbp at their own reasonable conversion rates.

Obviously your usd balance is added to your available margin. Same is true for transactions in other currencies, e.g. trading the estx50 will result in a euro balance as well.

pete