IB TWS Order Trigger method which to use ?

Discussion in 'Retail Brokers' started by james2hunt, Jan 30, 2011.

  1. IB TWS gives the following trigger methods. I am wondering which is best for Stop/Stop LMT orders. I have been using Last but am going to try the defaults value. I am looking to get the least amount of slippage on orders that are routed via SMART. I trade intra-Day holding positions for 5min to 2hrs and stocks with NASDAQ Avg Vol > 750K/day and NYSE Avg Vol > 1.5M/day and price range 15$-$100. Note my volume is adjusted higher for low price e.t.c i.e I want a stock with decent liquidity as my position size is in the range 1000-5000 shares

    TWS Trigger Methods
    Last
    Double Last
    Bid/Ask
    Double Bid/Ask (Default)
    Last or Bid/Ask
    Mid-point

    Default:


    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.

    Last:


    For a buy (sell) order to be triggered:

    • One last price value must be greater than (less than) or equal to the trigger price

    • The exchange or other market center where the order is to be executed must also publish (and the system must also receive) an ask price equal to or higher than, and a bid price equal to or lower than, the trigger price.

    • Last must be within the bid/ask (i.e. >=bid and <= ask) or within leeway percentage outside the bid/ask (i.e. >=bid-0.5% of last and <=ask+0.5% of last)

    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.

    Double Last:


    For a buy (sell) order to be triggered:

    • Two consecutive last price values must be greater than (less than) or equal to the trigger price, or

    • The last price value must be greater than (less than) or equal to the trigger price and the last size must be an increase.

    Bid/Ask:


    For a buy (sell) order to be triggered:

    • A single bid (ask) price must be greater than (less than) or equal to the trigger price.

    Double Bid/Ask:


    For a sell order to be triggered:

    • Two consecutive ask prices must be less than or equal to the trigger price, or

    • One ask price value must be less than or equal to the trigger price and the ask size must be an increase.

    For a buy order to be triggered:

    • Two consecutive bid prices must be greater than or equal to the trigger price, or

    • One bid price value must be greater than or equal to the trigger price and the bid size must be an increase.

    Last or Bid/Ask:


    For a buy (sell) order to be triggered:

    • A single bid (ask) or a single last price must be greater than (less than) or equal to the trigger price.

    Mid-point:


    For a buy (sell) order to be triggered:

    • The midpoint of the bid/ask must be greater than (less than) or equal to the trigger price.