how trailing orders from IB work?

Discussion in 'Order Execution' started by Bob111, Jan 19, 2003.

  1. Bob111


    i been watch them on demo and still did not understand, how it work... you buy 100 shares XYZ, enter amount of money -let say 10. When and how order will be executed?
    from what point trailing will be calculated?
    you bought 100 @ $100, but when you submit order, price was 101. it will be calculated from $101?

    that mean, if price fell to 91 (or 90?)right away( on last? or bid? or ask?), then your order will became what? market order?

    main reason, why i ask this question is that on demo i always recieve price outside of bid/ask. if you buy, it always higher than ask! how it work in real trade?
    thank you!
  2. If the bid is 101 and you put in a trailing stop at 10, your order will become a market order at a bid of 91. Obviously, if the the bid price goes up, so does your trailing stop.

    Have used the trailing stops on IB quite a bit and they seem to work well. Lets me get away from the computer while locking in some nice gains. Would recommend, however, that you see how a given stock typically trades first, to get a sense of its intraday volatility and how far away to place your trailing stop.
  3. Bob111


    so, as i understand, if you hold a stock, and place trailing stop for sale, stop then calculated from bid? right?
    and if you short stock and place order to buy for cover, then price for stop will be calculated from ask?

    thank you!
  4. svsv


    You can actually have the trailing stop price shown in TWS. Just read user guide, it has all the info you need.
  5. Bob111


    i read info before i post my question. there is no answer, from which price stop will be calculated. i need to know, when my stop will became a market order. what about, if you in stock with 5000-20000. price between ask, bid, last can be 1 or even more %.
  6. svsv


    Ok, I'll read it for you. In the layout setting, you can set up stop price on the order line, which shows the actual price for a trailing stop. So there is no guessing here, the stop price or the trailing stop price changes as mkt moves. Depending on your trigger method selection, it triggers as mkt order.
  7. Bob111


    maybe we read from different sources)))))))))
    here what i got:

    Trailing Stop and Auto Trailing Stop Orders

    A trailing stop is a sell order where the stop price is set at some fixed amount below the market price. If the market price rises, the stop loss price rises by this amount, but if the stock price falls, the stop loss price doesn't change. This technique allows an investor to specify a limit on the maximum possible loss, without setting a limit on the maximum possible gain. "Buy" trailing stop orders are the mirror image of sell trailing stop orders, and are used in falling markets.

    Trailing stop are available for all "Smart" routed stocks, and for all futures exchanges which currently support traditional stop orders.

    In addition, IB offers auto trailing stop orders which allows you to attach a trailing stop order to a limit order. The trailing stop will activate when the limit order is executed.

    IB does not recommend trailing stop orders, as there is no guarantee that your order will be filled at or near the designated stop price, which is especially dangerous in a rapidly falling market. In addition, trailing stop orders will accentuate volatility in rough markets.

    Trailing stop and auto stop orders are not available for FA accounts.

    ---no word about trigger method selection.
  8. Babak


    Customer trigger method for stop orders
    Customers may now specify how to trigger stop orders. To specify a trigger method, right click on an order management line and select Trigger Method. A trigger method dialog box will be displayed. Trigger methods currently available are: last method, double last method and double bid/ask method. If the last method is selected, stop orders will be triggered based on the last price. If the double last method is selected, stop orders will be triggered based on two last prices. If the double bid/ask method is selected, stop orders will be triggered based on two bids or asks.

    Next time, don't give up so easy. Do some searches on their website. :)
  9. Bob111


    as a average joe, i look for such info in user guide))))))not on release notes))))))
    Thank you!