Very long, I know, but trust me you will probably learn something very valuable that could save you lots of money. Read on... I usually get good fills on my stop-losses but today I got horrible exit sell prices on both of my trades. This is what happened on both of my trades : I was watching price go below my stop-loss price and my order did not trigger. Prices where staying near and below my stop-loss price and then went further down without my stop-loss ever being filled. Eventually it did get filled a big 0.10-11$ cents below ! I usually get out at 0.01-0.03$ from my stop price. It's not like prices crashed and I got hurt because of slippage, no it's just seems the order was not being executed. I contacted IB's tech support by chat and big surprise the guy said it was a normal execution (yeah, right...). I have looked at the T&S and noticed there was plenty of time for my order to get filled at a better price since prices stayed just below my stop price long enough. After more than an hour, the tech guy told me it was normal my stop was not triggered before because of the way the default stop trigger behavior is handled for NASDAQ stocks. Default behavior : http://www.interactivebrokers.com/php/webhelp/webhelp.htm#Making_Trades/trigger.htm For NASDAQ stocks (NMS, Small Cap, OTC) and US options, the default trigger method is the double bid/ask method, where two consecutive ask price (bid price) values must be less than (greater than) or equal to the trigger price, and the second bid or ask must have greater size if it is at the same price level as the first bid or ask. For CASH contracts, the default trigger method is bid/ask, where the ask price (bid price) value must be less than (greater than) or equal to the trigger price. For all other contracts, the default trigger method is the Last method, described below. ---- Seems like LAST price was not used which would explain why my stop was not triggered ! This is all very fishy and I can't believe this happened for 2 trades today. What are the chances ? How can I prove they were responsible for my losses because of the horrible & abnormal fills ?
From what I've seen it's very hard to hang your broker on poor fills for stop loss orders that you had out there. They are big on quoting the "rules" of NYSE vs. Nasdaq regarding stop losses and why/when they will be triggered and try to explain away poor fills with "liquidity" or lack of liquidity I should say. Nevermind most of the issues are the fact that the orders just aren't triggered nor don't execute when they are supposed to, especially smaller ones, they just sit there on the MM or specialist book, basically creating a free roll.
That's so true pdwst33. I really feel helpless and IB's tech support can surely give you an ATTITUDE about these things when you ask. They even closed the chat session after a while because it apparently exceeded the maximum time allowed ! Talk about good support... Did you guys know this : (from IB's website) NOTE: The Last method has leeway to trigger up to 0.5% above the ask price or up to 0.5% below the bid price. This 0.5% amount of leeway is subject to change at any time without notice. Can you imagine, 0.5% !!!!!!!!
So did the ask ever drop to your stop price? If not, then it won't execute. For example if your sell stop is 10, and the market is 9.95 x 10.05, the stop won't execute, no matter how many shares trade at 9.95. If the ask did go through your stop price, then you have a legitimate complaint.
Today I had a stop order in QID just sit there because the market was cross locked...another thing to keep in mind. Scottrade apparently won't execute orders if the market is locked or cross locked, nevermind that the stock could have traded at your stop price and proceeded to fall like a rock. I was watching it closely and I quickly cancelled the order and just sent it at the market. But what if I hadn't been watching it? Does that mean the product could be cross locked or locked for 10 minutes, trade down 30 cents, and when the bad quote moves, THEN i get executed? I'll bet a paycheck that's exactly what would have happened.
Htrader - Actually, it's a bit more complicated than that : ...the default trigger method is the double bid/ask method, where two consecutive ask price (bid price) values must be less than (greater than) or equal to the trigger price, and the second bid or ask must have greater size if it is at the same price level as the first bid or ask. At 10:45 Eastern, I had IMMR and my sell stop was at 18.93$. I got stopped out at 10:59 at 17.832 ! I'm not sure I fully understand that trigger rule. I'm definitely not sure how useful it is, that's for sure. pdwst33 - What makes a market cross locked ? Is it when the bid/ask are the same ? Does that happen often. Maybe that's what happened to my orders today ?
Cross locked is say 36.85 bid, and 36.83 offer, and the stock is clearly trading at 36.83 or lower because you can see prints on the tape at these prices. Simply put, the 36.85 bid is "bad" and sometimes doesn't move for awhile. It seems to happen in ETFs quite a bit. Locked is 36.85 bid, 36.85 offer, same circumstances...one of the quotes is "bad."
So why not cancel the stop loss and manually exit the trade if you think the stop loss is not executing appropriately? On the surface, .10 does sound a bit excessive on the slippage. Weren't there trades going off .03,.04.,05... below your stop while at the same time the Ask dropping below your stop-loss?
What kind of stock was this. No one 'usually' gets filled 1-3 cents from a stop unless you are trading a 5 cent stock. I see now it was IMMR. Lol , you must lead a charmed life worrying about 10 cents on a stock like that. I trade by hand. I dont trust stops. And if you had 10 cent slippage consider yourself lucky. Mechanical stops are not an insurance policy for a good fill, and you should know that
If your sell stop (18.93) is above the current market, it would turn into a market order immediately once submitted. I believe you meant 17.93 which IMMR did trade below and you got executed at 17.83 which I assume would be normal spread + slippage (10 cents) for IMMR.