Chasing the Bid/Ask with Interactive Brokers

Discussion in 'Order Execution' started by almostatrader, Aug 10, 2003.

  1. There are a lot of nice new interfaces available now for order execution with Interactive Brokers. One nice feature that a lot of them have is the ability to chase the bid or ask when entering an order. For instance if the bid is 995.25, I can send an order to buy at the bid. About half the time I will get my order filled at the bid. If the bid increases to 995.5, my bid can be set to automatically increase to 995.5 so the price doesn't get away from me. Basically it works out to that about half the time I'm saving the bid/ask spread.

    I'd like to be able to do the same thing when exiting the trade. Say for instance I've hit my target at 998.5 and I want to sell. I'd like to be able to place a sell order at the ask instead of just pressing a close button which sends a market order. It'd be nice to have the chase feature available for the trade exit so that if the price starts to drop, my order to sell at the ask will drop to follow it. Does anyone know if any of the order entry programs for IB will do something like this?
  2. I can't see why the exit would be any different from the entry. The order would be exactly the same as if you were opening a new short position and chasing the ask.
  3. Yes, it would be nice if I could just place an order to short it with the chase turned on once I hit my target. However, with any IB order entry program I've seen, once you've placed an order to buy, the sell or sell at the ask button is no longer available, you only have a close button.
  4. Am I missing something ....Market Order should serve the same purpose:confused:
  5. yes you miss!
  6. Basically I want to be able to exit with a Market Order plus/minus one tick. For instance, if I was in a long position and I want to exit the trade when the bid is 998.5 and the ask is 998.75. If I place a market order to close, I would likely get sold at the bid of 998.5. If the price dropped bid 998.25, ask 998.5 before my market order was filled it would sell at 998.25.

    What I want to do is place a limit order to sell at the ask at 998.75 with an automatic chase. If the price drops to bid 998.25, ask 998.5, I want my order to automatically drop to the new ask at 998.5.

    The chase system (see Ninjatrader) works very good for entering a trade, I'd like to do the same for exiting a trade. Does anyone know a way that I can do this?
  7. Ditch


    What about the other half of the time? You will chase the bid/ask, so in a fast moving market you will only get filled when price stalls. That might be a lot more than 1 tick below your initial entry point. Don't you think that bottom line this strategy levels out or even does worse than just selling the bid and buying the ask?