I am a long time customer of IB - probably 10+ years now. Back when I was first trading with them, there was a time when Instinet went down during a heavy trading day and caused all sorts of chaos with IB's order reporting. I had several orders into Instinet at the time and I tried to cancel them. I did not get a confirm on the cancels so I called in and was told that my orders were cancelled even though Instinet was offline. Later in the day (about 3:00pm), I started getting fill reports from Instinet on trades that had morning timestamps. All of the fill reports were buys and the market had a huge down move on the day (this was during the internet bubble days where there were huge percentage moves every day). Not only that but after all the fills came in I was heavily on margin and the margin auto-bot kicked in and started forcefully selling positions from my account. My account probably took a 50%+ hit that day. I contacted IB and gave them the details of what happened. I wrote a few e-mails and after IB looked into it they ate all of those trades. It took about two weeks for my money to reappear in my account. As a firm, they must have taken a bath that day because I am pretty sure that I was not the only one complaining about what happened. After that day, I believe IB explicitly changed its policies regarding orders whose status was unknown. I.e., they made it even more crystal clear that the customer was liable for all orders with an unknown status. I think the only reason I was made whole was because an IB rep had specifically stated that my trades were cancelled on the phone. So my experience is that IB has always treated me fairly. There have been a few other cases documented on ET where IB has refunded money to people's accounts. But most of the time, I don't think the original poster deserves to get refunded based on the evidence they provide.
Is there a reason that IB would choose not to use "Special Limit Order" versus "Enhanced Limit Order", whatever those are? I.e., is there a valid explanation why they wouldn't want to use "Special Limit Orders"?
Good to hear that IB was honest about their mistakes about ten years ago. Unfortunately this sort of good news didn't happen to me. What I experienced was completely opposite to yours. One week passed after the reply of the investigation, IB remained completely silent again. It didn't admitted it made a big mistake, not to say giving any indication about compensation. This gives me a feeling that IB is unfair and merely wants to shift the blame as much as possible.
Based on my about ten years of trading experience, I couldn't think of a valid explanation why someone would not want to use SLO in this case. ELO doesn't accept orders whose price is outside 5 price queues. What's the point of submitting an order which is destined to rejection? It made no sense at all. IB didn't explain why it chose ELO. The reply I received from the web ticket, when the staff said they finished the investigation, was (quoted): "According to the our investigation and audit trail of your order, the STOP LIMIT order in question had been triggered correctly, however, once triggered, the LIMIT order submitted had been rejected by the exchange as the exchange only accept LIMIT price up to 5 price queues and any price through this spread would be rejected." It appears the investigator-in-charge wasn't aware of the existence of SLO and supposed any limit order whose price is outside 5 price queues would be rejected by the exchange (what a joke!!). Its claim is blatantly wrong. I also found more problems in the reply of the investigation. Sigh! One week passed after the reply of the investigation. IB kept silent again. I'm still waiting for IB to give me valid reasons of its choice.
I did send you a PM with contact and further details and while you seem to refer to me as the "special investigator in charge" that is merely something you are assuming. The programmers know the details and they are the ones working on improving the logic perhaps with some suggestions from an inexperienced person like me who only has been deeply involved with the HKEX for the past 15+ years. It is in the programming queue and will be done. You talk as if you have great authority on the matter with phrases such as " supposed any limit order whose price is outside 5 price queues would be rejected by the exchange (what a joke!!). Its claim is blatantly wrong." Perhaps you should refer to the HKEX which defines SLO as: " Special Limit Order A special limit order will allow matching of up to 5 price queues (i.e. the best price queue and up to the 5th queue at 4 spreads away) at a time provided that the traded price is not worse than the input price. " Furthermore, a SLO has to be at or below the best bid for sell orders which can create further complications in a fast moving market. It isn't as cut and dry as you seem to think.
No, it's not you. I refer to the person who officially took charge of my case, handled and answered my ticket. I filed this case long time ago before this thread. I remember you did tell me that I must resort to the ticket system for specific problems due to regulatory reasons. You didn't look into my case, did you? You only guessed the possible causes of the problem. You never confirm your guess was the actual cause. I don't understand why you would think you were the investigator in charge when, in fact, you never look into my case. It is the reply of your staff-in-charge who handled my case. What he said, as you felt, sounds like he has great authority on the matter. Here's what he said on the issue: "According to the our investigation and audit trail of your order, the STOP LIMIT order in question had been triggered correctly, however, once triggered, the LIMIT order submitted had been rejected by the exchange as the exchange only accept LIMIT price up to 5 price queues and any price through this spread would be rejected." If he knew the existence of the SLO, why would he said such things? Please clarify if you know what your staff was talking about. I knew everything that you explained here. I remember it was me who gave you the link of the HKEX regarding the order types, which is http://www.hkex.com.hk/eng/market/sec_tradinfra/tradmech.htm I also told you in the PM, at that time if your guess was wrong, you should implement my suggested fixes. You agreed that the fix made sense. So now it seems you totally forget about it, suddenly believe that I know nothing about SLO, and said I should refer to the HKEX page about SLO. How funny! It's incorrect. It doesn't matter whether the stock is moving fast or slow. You should still submit it as SLO. First, make sure you understand that I set the limit price well below the market price because I prefer immediate execution. If I want to submit a sell order above the market price (that means I prefer queuing than immediate execution), I will of course not choose SLO, but this was not my case. Second, a SLO is intended to be used for limit price which is outside 5 price queues. An ELO is intended to be used for limit price which is within 5 price queues. An ELO outisde 5 price queues doesn't make sense because it's subject to immediate rejection. It has no benefit at all. Third, what if I submit a sell limit order which is 20 ticks below the market price? Based on your current (flawed) system, you still submit it as ELO which is again subject to immediate rejection. But if I use SLO, I get an immediate fill. Fourth, if the stock really goes lightning fast (when submitting and checking by the exchange, it is 20 ticks below, but some milliseconds later, it's suddenly above the market price), then neither ELO nor SLO will give you an immediate fill. My local brokers gave me choices so I can decide my destiny. IB doesn't and want to decide on my behalf. I have been using ELO and SLO for so many years. I thought so hard and I couldn't really think of a logical reason why you should use ELO in those cases. Well let's assume there are a few exceptionally rare cases that ELO may benefit, but this alone still cannot justify the use of ELO because I would incur a loss in the vast majority of cases. So tell me, what's the benefit of submitting it as ELO all the time?
assumed you were referring to me and i'd admit I'm a bit punchy today. yes you pointed me towards a link which I already knew all about. I'm not going to go tit for tat here and you are mostly correct with the routing. However, there are differences in the order types that need to deal with all situations. ie. what if you place a limit order above market (sale) and modify the order to match the offer? What if the market ticks the instant you submit the order? Given the exchange currently takes about 1 second to process an order this is not uncommon. In any event, the rep did his best to address your ticket and may not have been the expert you wanted to hear from. However, the issue of handling stops and a few other orders has been raised to programming and I've done my best to raise the priority in which we determine new logic and code the changes. That is taking place now and hopefully we'll have a solution that takes advantage of the appropriate order types at the opportune times. It would have been better service if we could have kept you better informed but please do understand, there are conversations and things going on behind the scenes. thanks for your understanding.
Points taken. Please note that the small delay (several hundred milliseconds to 1 second) shouldn't be a factor at all. Think about it. As a trader it's normal for you to decide what limit orders to use based on the price you see now, rather than (guessing) what price it would be after the small delay. Also think about what SLO/ELO/LO are for. Think about their purposes and actual usage. The so-called "small delay" problem is not really a problem once you got it. It's a good and fair response. Frankly I would have been much more satisfied if I had been treated in this way. I always receive a "work by design" response every time I report a bug or flaw in your software or system. I don't really understand why they are so reluctant to admit mistakes. Are they afraid they would be liable if they admit something went wrong in IB?
Similar scenario happened to me this morning on Globex. I used stop order which IB holds and executes on your behalf for Globex. Price traded through my stop level by 4 ticks and then back above the stop in about 15 seconds and stop never executed. I wanted the stop to take me out of the trade at market when price was hit, but it didn't.