IB TWS: Vertical Credit Spreads and Conditional Stop Orders

Discussion in 'Options' started by henrylim, Jul 27, 2005.

  1. henrylim



    I have recently gone on the TWS platform and I was trying to execute my 1st Vertical Credit Spread using the TWS.

    I was attempting to set a conditional STOP order but I have 2 conflicting advice.

    (1) For the SOLD leg, set up a BUY TO CLOSE order with condition set to submit order at less than or equal to breakeven stock price. The BUY TO CLOSE order should be transmitted at LMT equal to net credit premium.

    (2) FOR THE SOLD leg, set up a BUY TO CLOSE order with STP order type and Aux. Price equal to net credit premium.

    Which one is the correct one?

  2. ktm


    What are you trying to accomplish? If you are putting on the credit spread, you are selling to open and buying to open a different (cheaper) contract.

    There should not be a "buy to close" if you are initiating the position. I do not understand your post.

    You can also enter the order as a spread using the TWS, which can simplify this process even further.
  3. henrylim



    My previous queries is based on the assumption that I have already created a vertical credit spreads order.

    This is a sell combo order, where I have sell puts current month and have net credit.

    However, in anticipation of a possible market reversal, I would like to place a conditional stop order that will be triggered when the stock price hits my breakeven price.

    Let me know if I have managed to make myself clearer this time round.