IB Combotrader feature request - please vote.

Nov 4, 2016
3
0
11
#1
I've requested a new "feature" in IB TWS, and want to drum up some support for it in their feature poll to raise the prospect of it being implemented etc.

The feature I have asked for is in their Combotrader platform, in TWS, and is to do with a combo trade for a combination of stock/stock specifically.

at present when you create a stock/stock combo trade with 2 legs, one long one short, you get a "number" which you can set a stop loss on, but its not ideal, as the number they generate is as follows,

(stock a price * number of shares in leg) - (stock b price * number of shares in leg)

which gives you the figure, not ideal as I'm trading pairs, for the following reasons,

- if both legs fall , the number falls, triggering your stop if set, not ideal as I haven't lost any money at that point.

- if you set individual stops on each leg(possible) then again, if both legs rise you would be stopped out of the short leg, leaving you unhedged against the long leg.

so I propose a new "feature" in combo trader that allows the "number" to be a ratio as follows,

(stock a price * number of shares in leg) / (stock b price * number of shares in leg)

which would give you a "ratio" and a meaningful position stop loss level to protect you against above scenarios, but also protect you against a trade going against you, i.e. scenarios like the long leg falling and the short leg rising, or individually.

anyway, my request is that could people vote for this new feature on their platform, in the "features poll".

the poll is id#: number 13714

or you can get to it direct on the following url,

https://www.interactivebrokers.com/en/index.php?f=2493&sid=13714

thank you in advance for reading and hopefully voting for this new feature.

Steve W
 

Lee Shepherd

Well-known member
Feb 12, 2008
2,165
570
123
#2
I've requested a new "feature" in IB TWS, and want to drum up some support for it in their feature poll to raise the prospect of it being implemented etc.

The feature I have asked for is in their Combotrader platform, in TWS, and is to do with a combo trade for a combination of stock/stock specifically.

at present when you create a stock/stock combo trade with 2 legs, one long one short, you get a "number" which you can set a stop loss on, but its not ideal, as the number they generate is as follows,

(stock a price * number of shares in leg) - (stock b price * number of shares in leg)

which gives you the figure, not ideal as I'm trading pairs, for the following reasons,

- if both legs fall , the number falls, triggering your stop if set, not ideal as I haven't lost any money at that point.

- if you set individual stops on each leg(possible) then again, if both legs rise you would be stopped out of the short leg, leaving you unhedged against the long leg.

so I propose a new "feature" in combo trader that allows the "number" to be a ratio as follows,

(stock a price * number of shares in leg) / (stock b price * number of shares in leg)

which would give you a "ratio" and a meaningful position stop loss level to protect you against above scenarios, but also protect you against a trade going against you, i.e. scenarios like the long leg falling and the short leg rising, or individually.

anyway, my request is that could people vote for this new feature on their platform, in the "features poll".

the poll is id#: number 13714

or you can get to it direct on the following url,

https://www.interactivebrokers.com/en/index.php?f=2493&sid=13714

thank you in advance for reading and hopefully voting for this new feature.

Steve W
Hi Steve,

Would not a stop and limit order not suffice? Or have I missed something in your post?

Lee
 
Nov 4, 2016
3
0
11
#3
Hi Steve,

Would not a stop and limit order not suffice? Or have I missed something in your post?

Lee
Hi Lee,

The problem(s) are,

if you place a stop on the ratio as IB calculate it, then if both legs(long and short) both go down then you would trigger the stop, even though you would not have actually lost any money, as the short would have made money and the long lost money for you etc. - not ideal, as you would still be in the trade at that point having not lost anything and waiting for it to work.

again, if you place individual stops on each leg then one leg could trigger the stop in the same scenario and leave the other leg unhedged against the now stopped out position, as well as not actually losing you money if it was a ratio spread etc.

if you had a ratio of a/b, rather than a - b (which is what IB present to you) then you can still be protected by a stop and have both sides move down as the ratio that you placed the stop on would not have changed!

Hope that helps.

regards

Steve W