Suppose I make a stop-limit order like "sell at X price when Y price is hit" on Interactive Brokers TWS platform. Is this order visible to everyone else in the exchange? Are stop-limit orders visible to everyone else regardless of which broker is used? I am afraid someone may deliberately make a transaction to hit my order if my stop-limit order is visible.
I think broker's call these "server orders" because they only exist on the broker's servers until the stop price is hit, then it becomes a market order. From Interactive Broker's website ... Stop-Limit order is an instruction to submit a buy or sell limit order when the user-specified stop trigger price is attained or penetrated. The order has two basic components: the stop price and the limit price. When a trade has occurred at or through the stop price, the order becomes executable and enters the market as a limit order, which is an order to buy or sell at a specified price or better
Is it possible there are stop-limit orders which are exchange orders and are visible to everyone on the exchange if they subscribe to market data from the exchange?
I don't see how that's possible because the stop isn't an order. The only thing exchanges see are bid and ask prices ... what would a stop show up as in a level 2 quote ? It's not a bid, and it isn't an ask, and those are the only two options you have. You might imagine that market orders, limit orders, etc, are all showing up on the exchange differently, but all those mean is that with a "market order" the broker will hit the bid or ask price that immediately executes a trade, and with a "limit order" the broker will place your bid or ask into the book where you said to place it, and it may or may not get immediately executed depending on if someone hits it or not. But it is still just a bid or ask price, and those are the only two options. Obviously your broker has to know your stop price, because that's how they know to create a limit order, but where would they display something like that on an exchange for anyone else to see even if they wanted to ? And why would they do that ? The stop is executed by your broker, not the exchange. Edit .. it's no different than if you were sitting there and your best friend told you to place a limit order for them when a stock hit 30. It's between you and your friend .. you are the one who is going to create a limit order for them when the stock hits 30, not the exchange. In this case IB is the friend you are trusting to place the order for you when your stop is hit.
Thanks. It is only visible to Interactive Brokers. Being a satisfied customer of IBKR, I will stick to trusting them once more. IBKR has a reputation of having a good integrity so far compared to the smaller brokers.
For the super paranoid I think you can even route an order to a dark pool using Interactive Brokers, IEX, then, if I understand it correctly, nobody will even see your bid/ask, or since a quote isn't created they won't even know the trade happened. It's basically like it never even happened as far as the quote systems are concerned. Edit .. I don't know much about that, btw, and have no idea what the liquidity is like, etc, you'd have to research it if you were interested. Nothing I say is investment or trade advice.
Thanks for the tip. However, Interactive Brokers will have to know the stop-limit order. If someone inside IBKR wants to cheat, there is no way to avoid some level of exposure even if we route order to IEX.
I found what you are looking for on IB's website. Here is a list of exchanges from IB. https://www.interactivebrokers.com/en/?f=exchanges Example, clicking on "NYSE" takes you to a page that tells you the native order types for the NYSE including hidden, iceberg, limit, limit on close, limit on open, market on close, and market on open, and then all of the "Simulated by IB" including but not limited to Adjustable Stop, Basket, Conditional, Good After Time, .... Stop, Stop Limit .. etc.
My understanding is that stops dont show up in the order flow until they are triggered (if ever). Sure IB staff might see it, but they probably have bigger fish to fry ha.