What is the best way to place stop orders?

Discussion in 'Order Execution' started by gnom, Mar 1, 2010.

  1. gnom


    It often feels like specialists or MM can see my stop orders (even if I place them at not "usual spots"). I trade trough IB and I usually place "stop market" smart order. Is there a way for specialist/MM to see this order or to see my ID? Should I route to ARCA or other ecn? Does anybody know where stop orders sit at IB: on their server or visible to the market?

    In a way same goes with my limit orders when I want to sell at my target. What is the best way to place these? If I only show 100 shares on 1000 order who can see that?

    Thank you
  2. gkotopou


    I find placing hard stops in this algo-driven market is counter-productive esp. on less liquid issues--actually, even thicker stocks lately. As far your broker posting the order not sure how IB handles this. Im thinking wider mental stops, smaller size until we get some volatility back in this market.
  3. The "specialists" (not even sure who those are these days) can't see your stops. Rather, it's that everybody knows your stop is 3 ticks above the highest high of the day.

    Hope that helps.
  4. gnom


    Why is it counter-productive if nobody can see my stop? I'm trying to figure out if it's visible to anyone.
  5. external 3rd party software sitting on a virtual server.
    that simulates a stop and executes when it hits
    like bt,zlt, connected to ib

    never leave your stops on the actual market
    never show your hand


    For a trending up stock only:
    current price = $41.25

    1) lets say you want to buy something @ 40.50

    2) Put out a *large short order* , yes short order for $40.49

    3) set an cell text alarm for $40.52
    stupid market maker things he's onto an idiot
    when he drops the market

    4)buy into that asshole @ 40.51
    and kill the short order
  6. gnom


    Thank you for interesting suggestion

    When you say "never leave your stops on the actual market" what do you mean? I enter stop order with routing to Smart at IB. It's a "stop market" order, is this wrong? What would be better?
  7. This "never", "always", "forever" etc. stuff should be limited.

    If you're trading one instrument on a discretionary basis, then sure - keep your stops in your head and execute as necessary (though I could make an argument as to why you should leave your stops in the system).

    If you're an algorithmic trader, and you're watching 50 different instruments that trade 200 times a day, you need a mechanism to execute stops. You can keep those locally and execute market orders, or you can say F* IT, and accept the fact that a stop is a stop is a stop. Get stopped, and let the algorithm look for the next entry.

    For all those algos that hunt for stops, there's one that thinks it hit all the short stops, goes short, then gets run over itself by some junior trader at an IBank who buys 500 e-minis to go long the breakout. Your stops are so inconsequential it barely matters, except in your own head.
  8. How about paying some software programmer $500 and have him code an auto stop mechanism and save yourself from being picked off even once.
    But nah
    you'd rather leave your *50* position stops on the market, quite efficient
  9. gnom


    But again if I enter stop order with routing to Smart at IB can anybody see this stop? I'm not talking about 3 ticks above the high and stuff, let's say my stop is not something common, what I'm trying to find out is can my stop being seen by anybody? And if so, how in the world can they see stop that is sitting on the 3rd party server (or maybe it doesn't go to the server but to the specialist or mm) I called IB they said stops are on the server, but it just doesn't feel like this, my stops being hunted, how?
  10. probably stored on IB, only ib can see it.
    200-300 shares , nobody will go run it espically if its far from the market
    IB doesn't care either
    so you are probably safe
    any higher, simulate.
    #10     Mar 2, 2010