(simple) TWS auto-stop question

Discussion in 'Retail Brokers' started by illiquid, Feb 12, 2003.

  1. If you set up an automatic stop-loss order to be sent upon getting filled, does the stop-loss order's price parameters (bid -2, last -2, etc) move with the current bid/ask of the market until your order is executed? For example, I know once I press the hotkey to set the order up the stop-loss order's trigger is already pre-loaded at say 968 when the market is trading 970. If I wait until the market is at 975 to buy, will the stop-loss order automatically adjust to last -2 (973)? I know prior to execution it seems not to adjust with the market.

    In a related question, what happens to stop orders that are mistakenly priced above or below the market and transmitted (buy stop below market or sell stop above market - which could easily happen if the answer to my question above is NO) -- are they completely ignored?
     
  2. what's TWS?
     
  3. TGregg

    TGregg


    No no no, the question to ask is:

    What is this "stop order"? :D
     
  4. BKuerbs

    BKuerbs

    If you set up an automatic stop-loss order to be sent upon getting filled, does the stop-loss order's price parameters (bid -2, last -2, etc) move with the current bid/ask of the market until your order is executed? For example, I know once I press the hotkey to set the order up the stop-loss order's trigger is already pre-loaded at say 968 when the market is trading 970. If I wait until the market is at 975 to buy, will the stop-loss order automatically adjust to last -2 (973)? I know prior to execution it seems not to adjust with the market.

    No it does not. The prices are fixed the moment you press the hot-key and will not be changed. If you press the hot-key and do not xmit the order, but wait as described by you, it is probably best to cancel the order and press the hot-key again and to xmit then. Else you would have to adjust the price.


    In a related question, what happens to stop orders that are mistakenly priced above or below the market and transmitted (buy stop below market or sell stop above market - which could easily happen if the answer to my question above is NO) -- are they completely ignored?

    These order should be rejected by the TWS. I think I configured such orders erroneously and they were not accepted.

    If you want to test how different orders work, why do you not test them in the demo account? It does not always work like in reality, but it is a good way to learn how to use the TWS.

    regards

    Bernd Kuerbs
     
  5. when you hit the hotkey, whatever price shows up on the order, that's the order, regardless of what the market does afterwards. The auto stop is contingent. It does not become working until the limit is filled. If the mkt moves before you transmit the whole limit and autostop, it's better to just cancel and rehit the hotkey to get the current price. If you adjust one part, either the stop or the limit, it will not adjust the other.
     
  6. Thx for the responses.

    Anyone at IB know if this would be changed in the future? Wouldn't it be preferable to have stops move with the market before the order is transmitted, or is that asking too much?
     
  7. BKuerbs

    BKuerbs

    Why do you think this would be preferable?

    Let's look at an example:

    Say you enter a buy (it must be a buy limit) at 850, set a stop at 848. The auto-stop as it works waits till your order is filled and then sends the stop sell (if your order refers to Globex it should be an stop sell limit, see other thread). Say you get a fill at 848(market drops like a rock), the stop order is send and will probably be filled immediately. Good fills usually aren't good at all.

    Now assume your stop sets its price relative to your fill: then it would be xmitted with a trigger of 846, and assuming the market still drops, your loss will be larger, though near your accepted loss of 2 points.

    As you use a buy limit, your fill will not be above 850, so if the market starts to spike up you will be in at 850 with stop sell at 848 or will not be filled at all.

    Regards

    Bernd Kuerbs
     
  8. Why would I want my stop to remain at 848 if that's where I bought it? I'd want the stop to stay at -2 of wherever I'm executed, without the need for having to resend the order.
     
  9. BKuerbs

    BKuerbs

    TWS does not offer that, at least in the current version.

    Have a look at the "Freelance Tools" section at IB's home page. There are some tools that claim to offer this feature. Maybe you will find one of them to be useful.

    Regards

    Bernd Kuerbs
     
  10. def

    def Interactive Brokers

    Maybe I'm confusing the issue but with a hot key under configure you can set up an attached order to any limit order. Thus if you lift the offer, a stop will be send in price -X. Wouldn't this do the trick?
     
    #10     Feb 13, 2003