short sell limit question

Discussion in 'Order Execution' started by antincedo, Oct 31, 2008.

  1. ok prob a really newbie question but i just got ib and am using quotetracker, sim trading

    whenever i put in a limit order to short sell it gets filled automatically before it hits the limit price.

    what am i doing here?
     
  2. Is the price of your limit order greater than or less than the current market price quote?
     
  3. less than.. i suppose this is why?

    how do i put in a short limit order?
     
  4. TraDaToR

    TraDaToR

    LOL...You have to alert SEC about this software encouraging short selling
     
  5. TraDaToR

    TraDaToR

    For real, you need to use short "stop" orders
     
  6. Long: Stock is 25. You want to buy 100 at 24 --> Qty 100, Buy@limit 24. Will be executed when stock drops to 24 (simplistically).

    Short: Stock is 25. You want to short 100 at 26 --> Qty 100, Sell@limit 26. You will be short 100 shrs if stock rises to 26, if you don't already have a long position in the stock, and it is shortable.
     
  7. so i cant put a short in at a limit price if the stock is above that price?

    and i cant put a buy limit order if the limit price is below its current price?

    how to do the opposite of this
     
  8. Sounds like you really want a Stop-Limit order. With those, you specify a Stop price and a Limit price.

    Stop-Limit Short: Stock is 25. As it travels down, you want to initiate a short if/when it hits 24 --> Qty 100, StpLmt Sell Stop@24, Limit@24. This means the Limit order will not be "live" until the bid hits 24. Then the Sell Limit order will (hopefully) fill at 24.

    Note that in a fast market the stock could trade through 24 and then the limit sell will not execute. You may have to make the limit a bit lower than the stop. Use just a Sell Stop order if you just have to get in. Stop orders turn into Market orders at the stop price. But in a fast market/thin stock the fill price might be fairly far away.

    You really should read the complete user manual for your trading workstation. It will have all this stuff in there.