IB Stop Execution failure - IB Rep??

kiwi_trader · Jul 23, 2008

I've never had a limit or stop fail either ... the odd problem with my order entry tools but not tws.

But despite that I would not be surprised or particularly upset if I did have 1 or 2 problems a year. Its a lot of orders to have no problems.

On java I'm now using 1.6.0_10b27 on XP and the 64bit version on Windows Server 2008. No problems. What's more when I recently queried something technical with IB (at 2 levels of the organization because it was hard) I got no "change back to 1.5" requests! So that's progress

libertine · Jul 23, 2008

OK, sorry for not updating for a while, actually I got my latest reply back from IB on the 14th July which was just a few hours after I questioned them further so no complaints there.

Here's what I sent:

"1) Due to this issue, is it true that any stop could at any point fail to be executed without any warning or notice?

2) If so, is there anything IB could do to deal with a re-occurence of this issue differently which would ensure execution of an affected stop in some kind of timely fashion?"

..and here's what I got back :

"It is possible that due to unforeseen technical issues, stops may not trigger.

If the stop in question is submitted as a protective stop to close an existing position, and it failed to execute when it should have, traders are advised to manage the risk of the open position as quickly and efficiently as possible. If the execution to close the position is at a price that is worse than where the stop would have executed, a compensation request can be submitted requesting that the difference in cash be credited to the account.

The company does take the handling of stop orders very seriously and it is important to us that traders feel that they can rely on the stops to trigger at the appropriate time."

...which is fair enough in my opinion. Given IB have explained that it was a technical issue at NITE which caused the problem, and that they can't in reality foresee every technical issue that could potentially occur, the best they can probably do is offer compensation as and when it happens. How easy/successful the compensation process is I can't tell you - I lost a bit of extra cash on these positions over and above what they were going to lose anyway but no worse than I would expect from a particularly bad case of slippage, so I'm going to leave it at that.

I'll also point out that I'm in and out of an average of 50-60 positions a day via the API and have been for ages - and this is the first order execution problem I've had. I'd have to therefore disagree with the proposition that IB's software is inherently "buggy".

Wayne Gibbous · Jul 23, 2008

Just another FWIW for anybody wondering how things might work using Vista.

I bought a cheap triple core HP Vista machine from Staples. Kept it bone stock and threw TWS and Quotetracker on it. The thing works flawlessly and is a hellofa lot faster than my 6-7 year old XP machine (duh).

I just use it for trading, so the little Vista "quirks" don't bother me at all. For the price, <$1K w/ wide LCD, well worth it IMHO.

Good trading to all.

jimrockford · Jul 25, 2008

Quote from jonkry:

IBâs software is untrustworthy. I placed 2 stop loss trades that werenât executed.

One day, I bought 5 SPY calls. I was watching the quote screen and when the options lost 20 cents, I entered a bracket order to buy another 5, and to sell 10 (both positions) if the option dropped another 10 cents, or gained 40. The system accepted the order, and I checked that the order was active on the option trading screen and general order screen. They were. The trade went against me, and I watched as nothing appeared to happen. No execution. I immediately called IB customer service to make sure that the order was being reported correctly (as a non-execution; I didnât want to place a duplicate order.) I got through in 2 minutes, and the tech confirmed that my position wasnât closed and that I should âmanage my risk.â I closed the position while I was on the phone with him for more than double the loss I should have taken. I asked him what had happened. We went through a vebal checklist, and he couldnât figure out what happened till he saw that I enetered one order for 5 contracts and then another order for 5 with a bracket order to sell 10. He said that the order being unbalanced had screwed things up. (Sounded hokeyâ¦no other broker does this, but OK.) I asked why the system reported the orders as being active. He didnât know. The order log showed me entering the orders, and the system immediately deactivated the orders (without telling me, or giving an error message why), yet the orders showed as accepted and active on my screensâ¦and even more strangely, when my stop price was hit, the log showed the orders being activated and deactivated a second time (and not executed.) The tech said he would investigate, I never heard back from him. (What a surprise.)

Well, I got burned on that one. The IB manual hadnât mentioned anything about not being able to do an unbalanced order, but I figured in the future I would just enter 2 identical bracket orders, so they wouldnât be unbalanced. (I sell one order off at double the risk so I can have a free trade.)

Nope. The same thing happened again: my orders showed as being accepted and active on TWO screens (the option trading screen and general order screen-a separate window.) This time, one order was executed, and another wasnât. I modified the orders 3 times, and each time it reported no problems. Yet on the logs, it shows the orders accepted and immediately deactivated. If they were deactivated, how was I able to modify them? How was one identical order executed, and the other wasnât?

IBâs system is buggy, period. I lost confidence in their system. When I took this up with their tech, he was as dull and unhelpful as a butter knife. I told him what happened, looked at the trade logs, and he seemed unable to even see a problem. He seemed to think that they proved I had made a mistake, and I asked âAre you kidding? LOOK AT THEM. They show exactly the opposite!â (How two people can look at eactly the same thing and draw opposite conclusionsâ¦) I got the idea that whatever I pointed out about the trade in the logs made no difference to him. He was looking out for his job, and his job was to try to bamboozle customers and get rid of them, NOT help. They absolutely refused to take any responsibility. (*I* do when *I* mess up.)

Well, he succeeded: I took my money and ran. I figure it this way:

1. If their manual says you can do a trade and you canât, how can I have confidence in them?
2. Their system is screwy. How can I have confidence in it?
3. If their customer service is so inept, how can I have confidence in them?
4. If they absolutely refuse to take responsibility for bad tradesâ¦well, you get the idea.

The only good thing is that these problems showed up before I lost any big money with them.
A few good points about IB:
1. Despite what other IB customers have claimed about waiting a long time on the phone to get through, I always got through in a few minutes, whether for account information, or for customer no-service.
2. They have many order types-you might be able to customize the best for yourself.
3. Aftermarket trading platforms are available, if you trust IB to execute your order.
4. Their commissions are cheap, though if you trade a lot, you can get any broker to lower their commissions. If they screw your order up, though, it can be a very expensive way to save money.

Hope this helps someone.
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I wish you had escalated this situation to higher authority, to help IB to recognize the weaknesses in its trouble shooting and customer service. Sounds to me like IB dropped the ball on jonkry's case and lost themselves a customer.

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IB Stop Execution failure - IB Rep??

kiwi_trader

libertine

Wayne Gibbous

jimrockford