Order Types and Algos

The Accumulate/Distribute algo can help you to achieve the best price for a large volume order without being noticed in the market, and can be set up for high frequency trading. By slicing your order into smaller randomly-sized order increments that are released at random time intervals within a user-defined time period, the algo allows the trading of large blocks of stock and other instruments without being detected in the market. The algo allows limit, market, and relative order types.

For orders using the All or None (AON) attribute, IBKR will typically route to the native exchange, or hold the order if the AON order type is not supported by the primary exchange. When held, IBKR will attempt to simulate the order as follows:

• For US stock orders: The NBBO must qualify limit price AND the NBBO size must be equal to (or greater than) the order size + 1000 shares.
• For US options orders: The NBBO must qualify limit price AND the NBBO size must be equal to (or greater than) the order size + 10 contracts.

For example, an AON order to buy 1500 shares of ABC at $10.00/share will be held until the NBO qualifies (is less than or equal to $10.00) and the NBO size is equal to or greater than 2500 shares.

The order will remain active until it either executes or is canceled. The AON attribute can be used in conjunction with the basic order types and all times in force.

An auction order is entered into the electronic trading system during the pre-market opening period for execution at the Calculated Opening Price (COP). If your order is not filled on the open, the order is re-submitted as a limit order with the limit price set to the COP or the best bid/ask after the market opens.

Example

1. Select AUC from the Time in Force field.

You want to buy 10 XYZ futures contracts as an auction order at the calculated opening price, which you think will be the best price of the day. Create a buy order row, and selected MTL as the Type and AUC as the time in force. The market to limit order type with the AUC time in force define your order as an auction order. The order will be converted to a limit order at the Calculated Opening Price if it is not filled during the pre-market opening period.

Attach an opposite-side limit order to a complex multi-leg combination order. The limit price is determined using the Combo Order Preset values for the "Target Order." The attached order is a child order and will be linked to the parent order automatically with the OCA (one-cancels-other) tag. This order will be auto-submitted when the parent order fills.

First you will need to create a combination order in TWS. To do so, add a product into a watchlist (such as AAPL), select “Combinations” and choose one of the following options. For this example, we have selected Stock / Stock.

Example

Attach an opposite-side limit order to a complex multi-leg combination order. The limit price is determined using the Combo Order Preset values for the "Target Order." The attached order is a child order and will be linked to the parent order automatically with the OCA (one-cancels-other) tag. This order will be auto-submitted when the parent order fills.

First you will need to create a combination order in TWS. To do so, add a product into a watchlist (such as AAPL), select “Combinations” and choose one of the following options. For this example, we have selected Stock / Stock.

Example

Objective

To balance the market impact of trading the option with the risk of price change over the time horizon of the order. This strategy considers the user-assigned level of risk aversion to define the pace of the execution, along with the user-defined target percent of volume.

User Inputs

• Max Percentage of Average Daily Volume
• Urgency/Risk Aversion Level
  • Get Done
  • Aggressive
  • Neutral
  • Passive
• Attempt Completion by EOD checkbox

Important Points

• The max percent you define is the percent of the total daily options volume for the entire options market in the underlying.
• The level of trade urgency determines the pace at which the order is submitted over the day.
• A higher urgency executes the order more quickly, opening it to greater market impact; a lower urgency allows the order to fill over time and incur less market impact.
• Note that the algo uses a randomization feature to keep the algo hidden, and by default always attempts to execute quickly. The Urgency/Risk Aversion selections are driven by the size of the order; it is designed for orders that will impact a high percent of the Average Daily Volume and its mechanism may be insignificant for smaller orders.
• If Attempt Completion by End of Day is checked, we will try to complete the order today. Please note that we may leave a portion of the order unexecuted if the risk of the price changing overnight is less than the extra cost of executing the whole order today.
• Available for US Equity and Index Options.

TWS BasketTrader can be used to manage baskets of securities or other asset classes. Portfolio managers and investors can build a spreadsheet of tickers for import to TWS or simply add directly to a TWS page and save as a basket. Order size, type and price can be built before saving the entire group as a Basket for execution at a later time, and these values can be modified when you're ready to trade the basket. Because BasketTrader is flexible and configurable, investors can quickly access an established portfolio, rebalance, and manage baskets before submitting orders.

Example

You want to place a group of orders for a number of different instruments at one time. Before you can select and transmit your basket order, you must create and save the basket file:

First, create orders to include in the basket file. Modify the order parameters and define the order attributes as required. Next, on the Trade menu, select Save Orders as Basket. In the dialog box, review or rename the file using a .csv extension (for example, stocks.csv) then click OK. The system uses the Trading page name as the default basket name. Now cancel the orders you created by selecting Cancel Page from the Trade menu.

Next, place your basket order using the BasketTrader. On the Trading Tools menu, select BasketTrader, or click the Basket icon on the trading toolbar. In the Basket File field, select a basket file from the list or click the Browse button to find a basket file that doesn't appear in the list. Modify the Multiplier if necessary. This value multiplies the quantity of each order in the basket. Modify the order parameters if necessary, then submit the entire basket order. You can submit individual orders within the basket using the market data lines on the Orders tab.

A single Basket order can contain multiple order types on various products, and include any supported time in force or order attribute. The image below shows a limited sample of a basket order file that has been opened in MS Excel.

The Block attribute is used for large volume option orders on ISE that consist of at least 50 contracts. To execute large-volume orders over time without moving the market, use the TWS Accumulate/Distribute trading tool.

Example

1. Select the checkbox in the Block Order field.

You want to buy 10,000 XYZ option contracts for the best possible price. You select the XYZ option ticker line, then open the Order Ticket. In the Exchange field, you select ISE, then in the Price field you enter a limit price. Next you click the Miscellaneous tab and click the Block Order checkbox. This ensures that your order is made public and may result in a price improvement. You click Transmit to submit your order, or Accept to display the order on the trading screen before you submit it.

A Box Top order executes as a market order at the current best price. If the order is only partially filled, the remainder is submitted as a limit order with the limit price equal to the price at which the filled portion of the order executed.

Bracket orders are designed to help limit your loss and lock in a profit by "bracketing" an order with two opposite-side orders. A BUY order is bracketed by a high-side sell limit order and a low-side sell stop order. A SELL order is bracketed by a high-side buy stop order and a low side buy limit order.

The order quantity for the high and low side bracket orders matches the original order quantity. By default, the bracket order is offset from the current price by 1.0. This offset amount can be changed on the order line for a specific order, or modified at the default level for an instrument, contract or strategy using the Order Presets feature in Global Configuration.

Mosaic Example

In this example, we wish to buy 1,000 shares in ticker TSLA at a price of no more than $219.50. However, at the same time we want to determine a Stop Loss order to sell the shares should the price drop to $218.00. We also wish to place a Profit Taking order in the event that TSLA rises to $221.00 during the session. Enter the desired ticker and click the Buy button, which causes the background to turn blue. Sell orders create a red background. Enter the number of shares to be purchased and select LMT from the Order Type dropdown menu. Next set your limit price at which you are prepared to buy shares. Change the TIF field if required. Users may select the Time-in-Force field to select a Good-til-Cancelled duration for the trade. In this example, we are using a Day order.

Assumptions

Next, click on the Advanced button to the right of the TIF field to display more order entry options. Click on the Attach button to the right to reveal Bracket functionality. By checking the Bracket box, users will see that the Profit taker and Stop Loss fields are automatically checked. Enter the desired values for the Profit Taker Limit order. And enter the desired Stop Limit sell order price. Once again, users may change the TIF if necessary before clicking the Submit button to enter the completed order.

Classic TWS Example

Order Type In Depth - Bracket Order

Conditional orders allow the user to attach one or more stipulations that must be true before the order can be submitted. This might allow an investor to only buy/sell an option if its underlying is trading above or below a specified level. Alternatively, the condition might cause the order to become active only when an index is trading above or below a specific range. The Conditional order type may draw together multiple stipulations that might make it harder for the trade to execute, yet which would safeguard the investor from trading outside of circumstances under which he would prefer not to trade.

Setting FOK as the time in force dictates that the entire order must execute immediately or be canceled. A trader might see a short-lived opportunity to buy or sell an option that would suit a strategy or fit within a portfolio. However, the time opportunity might be subject to buying or selling a minimum number contracts. The fill-or-kill order type is designed to ensure that the investor does not receive a partial fill that would not suit his current appetite. Failure to fill the entire order upon immediate submission to the market causes the system to cancel the order in its entirety.

A Funari order is submitted as a limit order at the user-specified limit price, with any unfilled quantity resubmitted as a Market-On-Close order at the end of the trading session. Market-On-Close orders execute as close to the closing price as possible.

The GTD (Good-til-Date/Time) time in force lets you select an expiration date and time up until which an order will continue to work. Setting this attribute requires both a time in force selection of GTD, a date entry in the Expiration Date field, and a time entry in the Expiration Time field if that level of detail is required. Note that if you only enter a good-till date, the unfilled order will cancel at the close of the market on the specified day.*

Example

1. Use Customize Layout > Order Columns to display the Exp. Date and Exp. Time fields
2. Click the Ask Price to create a BUY order
3. Enter the Limit Price in the LMT Price field

Investors wishing to hide large-size orders can do use by applying the "Hidden" attribute to a large volume order to completely hide the submitted quantity from the market. The Hidden order type is a simple solution to maintaining anonymity in the market when trying to buy or sell large amounts of stocks, options, bonds, warrants, futures or futures options. The Hidden order type is simple to add to the main trading window within TWS and requires a simple check-mark in the box in order to activate. Display the Hidden field from the Layout Manager, and check the Hidden attribute in the order line. Your order is submitted but evidence of the order is hidden from the market.

Customers can direct U.S. stock orders to the IBKR ATS destination to add liquidity. Orders directed to IBKR ATS are automatically tagged as "not held" orders, and are posted in IBKR's order book where they are eligible to trade against incoming SmartRouted orders that are marketable against them.

A variety of order types are available for posting liquidity in IBKR ATS, including Pegged-to-Midpoint, Pegged-to-Best, Relative/Pegged-to-Primary, and Pegged-to-Market, as well as priced limit orders.

Pegged-to-Midpoint orders directed to IBKR ATS are unique in the industry as they allow for positive and negative offsets, with rounding instructions for when the effective price falls on a whole or half minimum tick increment. This allows for greater customization of your order and allows it to compete more effectively with other Pegged-to-Midpoint orders that are resting in the IBKR ATS.

Also unique in the industry, Pegged-to-Best orders allow for directed orders to IBKR ATS to compete not only with the prevailing NBBO, but also with other orders resting in the IBKR ATS, up to the NBBO midpoint.

Direct IBKR ATS routing can be used in conjunction with a number of IB ALGOS such as Accumulate/Distribute, along with the order types described above.

Directed liquidity-adding orders to IBKR ATS whose effective price would match or cross the opposite side NBBO are repriced to be 1 minimum tick increment away (less aggressive) from the opposite side, except for Pegged-to-Midpoint orders with positive offsets when the NBBO spread is one cent, in which case the order would be repriced to the NBBO midpoint.

All orders directed to the IBKR ATS can be specified to rest in IBKR ATS for a fixed period of time, after which they will be rerouted as a SMART order.

Directed orders to add liquidity to IBKR ATS may also specify a minimum quantity that indicates the minimum size contra side order that the directed order is allowed to interact with. For example, a customer may direct a liquidity-adding order for 10,000 shares with a minimum quantity of 1,000 shares. In this case, only Smart Routed orders with a size greater than or equal to 1,000 shares will be allowed to trade against the directed liquidity adding order.

Pegged-to-Best, an order type unique to IBKR, allows clients to direct liquidity-adding orders to the IBKR ATS that compete not only with the near side NBBO, but with other same side liquidity adding orders resting in the IBKR ATS.

The Pegged-to-Best order price will float such that it is always pegged to be one penny more aggressive than the better of the near side NBBO and the best-priced, same side resting liquidity-adding order in the IBKR ATS, up to the NBBO midpoint minus (for a buy) or plus (for a sell) a user-defined number of increments, providing a high probability of trading with IBKR client Smart Routed orders on the opposite side.

Like all other pegged orders available in the IBKR ATS, Pegged-to-Best orders may contain a limit price that specifies the most aggressive price at which the order may be priced.

Since the Pegged-to-Best order not only competes with the near side NBBO but also with other same-side liquidity-adding orders in the IBKR ATS, customers may specify the minimum cumulative size of those same side orders that are priced equal or better, at which the order is allowed to compete (Minimum Competing Size). This provides the customer with a level of protection against having their orders complete with smaller sized orders. Unless specified by the customer, the default value is 100 shares.

If you choose to set the "Compete again best bid/ask Offset" field to "Up to Mid," we provide two additional fields that allow you to set an offset OFF THE MIDPOINT that will be applied to the order.

If you elect to use an offset, to ensure that your order complies with the sub-penny pricing rule of Regulation NMS - which requires the price for orders over $1.00 to be submitted in increments of no smaller than one cent - we require two offset values:

• The primary offset that you define is applied when the spread is an even number of cents wide (and therefore the mid-price is a whole-penny price). This offset must be in whole-penny increments or zero.
• The secondary offset is automatically applied when the spread is an odd number of cents wide (and therefore the mid-price is a half-penny price). This offset must be in half-penny increments (so that when added to or subtracted from the half-penny midpoint price, the result is a whole-penny price).

For orders where the midpoint falls on the penny, the primary offset is added to (for SELL orders) or subtracted from (for BUY orders) the midpoint to get the order price (i.e., positive offsets make the order less aggressive, negative offsets make it more aggressive). For example, for a buy order with a Bid/Ask of $10.10 - $10.18 and a primary offset of $0.02, the midpoint of $10.14 minus the offset of $0.02 results in an effective order price of $10.12.

In cases where the midpoint falls on the half-cent, the secondary offset (set by default to $0.005 from the primary offset) is automatically used. For example, for a buy order with a Bid/Ask of $10.10 - $10.17 and an offset of $0.01 and a secondary offset of $0.005, the midpoint of $10.135 minus the secondary offset of $0.005 results in an effective order price of $10.13.

Example 1:

Example 2:

Similar to the standard Pegged-to-Midpoint order, the IBKR ATS Pegged-to-Midpoint (w/optional offsets) seeks to fill by resting liquidity at the midpoint of the National Best Bid and Offer (NBBO). But the IBKR ATS order type also lets you compete for liquidity by applying offsets to the mid-price. Additionally, commissions on filled orders may be more favorable than commissions on Pegged-to-Midpoint orders on other exchanges. See the IBKR ATS Fees and Rebates page for details.

If you elect to use an offset, to ensure that your order complies with the sub-penny pricing rule of Regulation NMS - which requires the price for orders over $1.00 to be submitted in increments of no smaller than one cent - we require two offset values:

• The primary offset that you define is applied when the spread is an even number of cents wide (and therefore the mid-price is a whole-penny price). This offset must be in whole-penny increments or zero.
• The secondary offset is automatically applied when the spread is an odd number of cents wide (and therefore the mid-price is a half-penny price). This offset must be in half-penny increments (so that when added to or subtracted from the half-penny midpoint price, the result is a whole-penny price).

For orders where the midpoint falls on the penny, the primary offset is added to (for SELL orders) or subtracted from (for BUY orders) the midpoint to get the order price (i.e., positive offsets make the order less aggressive, negative offsets make it more aggressive). For example, for a buy order with a Bid/Ask of $10.10 - $10.18 and a primary offset of $0.02, the midpoint of $10.14 minus the offset of $0.02 results in an effective order price of $10.12.

In cases where the midpoint falls on the half-cent, the secondary offset (set by default to $0.005 from the primary offset) is automatically used. For example, for a buy order with a Bid/Ask of $10.10 - $10.17 and an offset of $0.01 and a secondary offset of $0.005, the midpoint of $10.135 minus the secondary offset of $0.005 results in an effective order price of $10.13.

Orders that use an offset also include an automatic price cap at the opposite side of the NBBO minus/plus 1 tick to help keep the order price from becoming too aggressive and ending up on the bid or ask. For a buy order, the opposite side is the offer; for a sell, it's the bid. For example, for a buy order with a Bid/Ask or $10.10 - $10.14 and a primary offset of $0.02, the midpoint of $10.12 minus the offset of $0.02 results in an order price of $10.10 which is equal to the bid. Instead, we cap the order at the opposite side of the NBO ($10.14) minus 0.01 to get an order price of $10.13.

Clients who elect to direct liquidity-providing orders to IBKR ATS can choose to have the trading system reroute the order to SMART after it has rested on IBKR ATS for a user-specified number of minutes.

Access this feature anywhere you can choose IBKR ATS as your routing destination, for example in the Mosaic Order Entry tile's Advanced panel when IBKR ATS is selected as the destination and in Accumulate/Distribute when you check "Route to IBKRATS". Simply enter the number of minutes you want the order to rest in the field labeled "Reroute to SMART after..." You can also define a preset number of minutes in Global Configure from the "For Orders Routed to IBKR ATS" section of the Stocks Preset.

Why pay the spread to take liquidity for your options orders? IBKR clients can now add liquidity and interact with our retail order flow by direct-routing their US equity and index options orders to the IBUSOPT destination.

Orders routed to IBUSOPT will be held at this liquidity-providing destination, and will be eligible to participate in an exchange auction to potentially fill against other SMART-routed marketable orders from IBKR clients.

• All IBUSOPT orders will be used to start an auction at the exchange.
• Orders routed to IBUSOPT are not guaranteed to fill.

Pegged-to-Best, an order type unique to IBKR, allows clients to direct liquidity-adding orders to IBUSOPT that compete not only with the near side NBBO, but with other same side liquidity adding orders resting in IBUSOPT.

The Pegged-to-Best order price will float such that it is always pegged to be one penny more aggressive than the better of the near side NBBO and the best-priced, same side resting liquidity-adding order in the IBUSOPT, up to the NBBO midpoint minus (for a buy) or plus (for a sell) a user-defined number of increments, providing a high probability of trading with IBKR client Smart Routed orders on the opposite side.

Like all other pegged orders available in IBUSOPT, Pegged-to-Best orders may contain a limit price that specifies the most aggressive price at which the order may be priced.

Since the Pegged-to-Best order not only competes with the near side NBBO but also with other same-side liquidity-adding orders in IBUSOPT, customers may specify the minimum cumulative size of those same side orders that are priced equal or better, at which the order is allowed to compete (Minimum Competing Size). This provides the customer with a level of protection against having their orders complete with smaller sized orders. Unless specified by the customer, the default value is 1 contract.

If you choose to set the "Compete again best bid/ask Offset" field to "Up to Mid," we provide two additional fields that allow you to set an offset OFF THE MIDPOINT that will be applied to the order.

If you elect to use an offset, to ensure that your order complies with the minimum tick rule, we require two offset values:

• The primary offset that you define is applied when the spread is an even number of cents wide (and therefore the mid-price is a whole-penny price). This offset must be in whole-penny increments or zero.
• The secondary offset is automatically applied when the spread is an odd number of cents wide (and therefore the mid-price is a half-penny price). This offset must be in half-penny increments (so that when added to or subtracted from the half-penny midpoint price, the result is a whole-penny price).

For orders where the midpoint falls on the penny, the primary offset is added to (for SELL orders) or subtracted from (for BUY orders) the midpoint to get the order price (i.e., positive offsets make the order less aggressive, negative offsets make it more aggressive). For example, for a buy order with a Bid/Ask of $10.10 - $10.18 and a primary offset of $0.02, the midpoint of $10.14 minus the offset of $0.02 results in an effective order price of $10.12.

In cases where the midpoint falls on the half-cent, the secondary offset (set by default to $0.005 from the primary offset) is automatically used. For example, for a buy order with a Bid/Ask of $10.10 - $10.17 and an offset of $0.01 and a secondary offset of $0.005, the midpoint of $10.135 minus the secondary offset of $0.005 results in an effective order price of $10.13.

Pegged-to-Best, an order type unique to IBKR, allows clients to direct liquidity-adding orders to IBUSOPT that compete not only with the near side NBBO, but with other same side liquidity adding orders resting in IBUSOPT.

The Pegged-to-Best order price will float such that it is always pegged to be one penny more aggressive than the better of the near side NBBO and the best-priced, same side resting liquidity-adding order in the IBUSOPT, up to the NBBO midpoint minus (for a buy) or plus (for a sell) a user-defined number of increments, providing a high probability of trading with IBKR client Smart Routed orders on the opposite side.

Like all other pegged orders available in IBUSOPT, Pegged-to-Best orders may contain a limit price that specifies the most aggressive price at which the order may be priced.

Since the Pegged-to-Best order not only competes with the near side NBBO but also with other same-side liquidity-adding orders in IBUSOPT, customers may specify the minimum cumulative size of those same side orders that are priced equal or better, at which the order is allowed to compete (Minimum Competing Size). This provides the customer with a level of protection against having their orders complete with smaller sized orders. Unless specified by the customer, the default value is 1 contract.

If you choose to set the "Compete again best bid/ask Offset" field to "Up to Mid," we provide two additional fields that allow you to set an offset OFF THE MIDPOINT that will be applied to the order.

If you elect to use an offset, to ensure that your order complies with the minimum tick rule, we require two offset values:

• The primary offset that you define is applied when the spread is an even number of cents wide (and therefore the mid-price is a whole-penny price). This offset must be in whole-penny increments or zero.
• The secondary offset is automatically applied when the spread is an odd number of cents wide (and therefore the mid-price is a half-penny price). This offset must be in half-penny increments (so that when added to or subtracted from the half-penny midpoint price, the result is a whole-penny price).

For orders where the midpoint falls on the penny, the primary offset is added to (for SELL orders) or subtracted from (for BUY orders) the midpoint to get the order price (i.e., positive offsets make the order less aggressive, negative offsets make it more aggressive). For example, for a buy order with a Bid/Ask of $10.10 - $10.18 and a primary offset of $0.02, the midpoint of $10.14 minus the offset of $0.02 results in an effective order price of $10.12.

In cases where the midpoint falls on the half-cent, the secondary offset (set by default to $0.005 from the primary offset) is automatically used. For example, for a buy order with a Bid/Ask of $10.10 - $10.17 and an offset of $0.01 and a secondary offset of $0.005, the midpoint of $10.135 minus the secondary offset of $0.005 results in an effective order price of $10.13.

Investors submitting large volume orders for stocks, warrants, futures and options may wish to conceal the full size of their order to avoid anticipatory action from other market participants. The Iceberg/Reserve attribute, applied through the Display Size field, provides a way to submit large volume orders to the market in increments while publicly displaying only a specified portion of the total order size. The Display Size field can be added to a trading page within TWS by configuring the Layout Manager and selecting the appropriate field, which can be user-populated at the time of order input, to display just a fraction of the entire order.

The Immediate-or Cancel (IOC) time in force applied to an order dictates that any portion of the order that does not fill immediately will be canceled.

Order Type In Depth - Immediate or Cancel Buy Order

A Limit order is an order to buy or sell at a specified price or better. The Limit order ensures that if the order fills, it will not fill at a price less favorable than your limit price, but it does not guarantee a fill.

The LMT + MKT order type is available for certain multi-leg combinations, and when used with a non-guaranteed combination order it could help to increase the chances of all legs in the order being filled. Initially one or more legs are submitted as limit orders, but if the first leg fills or partially fills, the remaining legs are resubmitted as market orders.

A Limit if Touched is an order to buy (or sell) an instrument at a specified price or better, below (or above) the market. This order is held in the system until the trigger price is touched. An LIT order is similar to a stop limit order, except that an LIT sell order is placed above the current market price, and a stop limit sell order is placed below.

Using a Limit if Touched order helps to ensure that, if the order does execute, the order will not execute at a price less favorable than the limit price.

Limit if Touched Buy Order Example

1. Click the Ask Price to create a BUY order
2. Select LIT in the Type field
3. Enter the price at which you want the order to execute in the LMT Price field
4. Enter the trigger price in the Trigger Price field
5. Click T to transmit the order

A Limit-on-close (LOC) order will be submitted at the close and will execute if the closing price is at or better than the submitted limit price.

All LOC orders must be received at Island by 15:58:00 EST, but may not be canceled or modified after 15:50 EST.

Summary of NYSE markets (NYSE, NYSE MKT, NYSE Arca) rules for entering/canceling/modifying limit-on-close (LOC) orders.

• All LOC orders must be received at NYSE markets by 15:50 ET.
• Exception: On expiration days, you cannot enter LOC orders after 15:45 ET to establish or liquidate positions related to a strategy involving derivative instruments, even if these orders would offset a published imbalance.

NYSE markets' rules also prohibit the cancellation or reduction in size of any limit-on-close (LOC) order after 15:50 ET.

A Limit-on-Open (LOO) order combines a limit order with the OPG time in force to create an order that is submitted at the market's open, and that will only execute at the specified limit price or better. Orders are filled in accordance with specific exchange rules.

A Market order is an order to buy or sell at the market bid or offer price. A market order may increase the likelihood of a fill and the speed of execution, but unlike the Limit order a Market order provides no price protection and may fill at a price far lower/higher than the current displayed bid/ask.

A Market if Touched (MIT) is an order to buy (or sell) an instrument below (or above) the market. Its purpose is to take advantage of sudden or unexpected changes in share or other prices and provides investors with a trigger price to set an order in motion. Investors may be waiting for excessive strength (or weakness) to cease, which might be represented by a specific price point. MIT orders can be used to determine whether or not to enter the market once a specific price level has been achieved. This order is held in the system until the trigger price is touched, and is then submitted as a market order. An MIT order is similar to a stop order, except that an MIT sell order is placed above the current market price, and a stop sell order is placed below.

A Market-on-Close (MOC) order is a market order that is submitted to execute as close to the closing price as possible.

Summary of NYSE markets (NYSE, NYSE MKT, NYSE Arca) rules for entering/canceling/modifying market-on-close (MOC)

• All MOC orders must be received at NYSE markets by 15:50 ET, unless entered to offset a published imbalance.
• NYSE markets' rules also prohibit the cancellation or reduction in size of any market-on-close (MOC) order after 15:50 ET.

Summary of Nasdaq rules for entering/canceling/modifying market-on-close (MOC)

• All MOC orders must be received at Island by 15:55:00 EST, but may not be canceled or modified after 15:50 EST.

A Market-on-Open (MOO) order combines a market order with the OPG time in force to create an order that is automatically submitted at the market's open and fills at the market price.

Notes for MOO Orders

• IB may simulate market orders on exchanges. See details on market order handling using simulated orders.
• Nasdaq MOO (and LOO) orders must be submitted prior to 09:28 ET.
• Options Orders: MOO orders for options must be directed to an exchange. The OPG time in force for directed options orders will only be available when you select a routing destination that supports this order type, for example CBOE, CBOE2 or MIAX.
• Option functionality for MOO orders may not be available in the PaperTrader.

A Market-to-Limit (MTL) order is submitted as a market order to execute at the current best market price. If the order is only partially filled, the remainder of the order is canceled and re-submitted as a limit order with the limit price equal to the price at which the filled portion of the order executed.

This order type is useful for futures traders using Globex. A Market with Protection order is a market order that will be cancelled and resubmitted as a limit order if the entire order does not immediately execute at the market price. The limit price is set by Globex to be close to the current market price, slightly higher for a sell order and lower for a buy order.

Please note that this order type is not available in TWS PaperTrader.

The MidPrice order is designed to split the difference between the bid and ask prices, and fill at the current midpoint of the NBBO or better. Set an optional price cap to define the highest price (for a buy order) or the lowest price (for a sell order) you are willing to accept.

To achieve the midpoint price or better, the Midprice algo routes the order to the exchange with the highest probability of filling as a Pegged-to-Midpoint order, or in the case of IEX as a Discretionary Peg (D-Peg) order. If no such exchange is available, the MidPrice order is routed as either a native or simulated Relative order.

Objective

The Minimize Impact algo lets you control your level of participation in the Average Daily Options Volume by setting a Max Percentage value, and attempts to minimize market impact by slicing the order over time to achieve a market average without going over your specified Max Percentage of Average Daily Volume.

User Inputs

• Max Percentage of Average Daily Options Volume

Important Points

• The max percent you define is the percent of the total daily options volume for the entire options market in the underlying.
• Set the limit price in terms of volatility by using the VOL order type.
• Set the Max Percentage from 1% to 50%. If left blank, the default value is 50%.
• Available for US Equity and Index Options.

One-Cancels All (OCA) order type allows an investor to place multiple and possibly unrelated orders assigned to a group. The aim is to complete just one of the orders, which in turn will cause TWS to cancel the remaining orders. The investor may submit several orders aimed at taking advantage of the most desirable price within the group. Completion of one piece of the group order causes cancellation of the remaining group orders while partial completion causes the group to rebalance.

Classic TWS Example

You want to buy some tech stock at the best possible price, but you only want 100 shares. You could buy 100 shares of YXX at $11.40/share, XYZ at $19.60/share, or YZZ at $16.80, but you don't want more than 100 shares total. Before you place the order, display the OCA Group column on the trading screen. Then create a buy limit order for YXX, selecting LMT in the Type field and entering $11.40 in the Lmt Price field. In the OCA Group field, enter a group name, for example "Tech." Create two more limit orders, one for XYZ at $19.60 and one for YZZ at $16.80, and in the OCA Group box enter the same name, "Tech," to link these orders. After you have created all orders for a group, transmit the OCA order by selecting Transmit Page on the Order menu. You have created a one-cancels-all (OCA) group. If one of the orders executes, the other two orders are automatically canceled. If one of the orders partially executes, the quantity of each of the other orders is reduced proportionately. If an order in the group is canceled, the remaining orders are also canceled.

You can instruct an order to continue to work after normal trading hours have ended by enabling Outside RTH (outside regular trading hours). You can manage the Outside RTH attribute as a default order preset, and also on a per order basis.

You may set Outside RTH for an order, or set it as the order default for a specific asset type.

Note: If you want Outside RTH enabled by default, you only need to define the preset in ONE platform. It is then automatically applied across all of your trading platforms.

Interested in trading US Stocks and ETFs after the exchanges have closed? Interactive Brokers has partnered with liquidity provider Blue Ocean to offer access to streaming quotes beyond the two typical sessions - regular and extended US-trading hours. Interactive Broker clients can trade over 10,000 U.S. stocks and ETFs from 8pm ET to 3:50 am ET Sunday to Friday using the IBKR Overnight destination. Trades executed between 8:00pm and 12:00am will carry a trade date of the following day.

See the exchange listing page by clicking the "Exchange" tab and searching "Overnight" for a complete listing of the available US stocks and ETFs.

Limit order trades can be placed within TWS, Client Portal and Mobile TWS and clients are eligible to trade with their existing US stock trading permission but must enable Overnight trading in the Client portal.

Clients can set the destination to Overnight by setting the Time-in-Force to Overnight Trading. The Overnight order destination combines internal and external liquidity providers to display the live NBBO for all available liquidity.

IBKR's Overnight + SMART order type allows you to submit orders in the overnight trading session that will also work through 8:00pm the following day as a SMART-routed order.

The attached Pair Trade can be used to hedge one contract against another, generally in the same industry. Offset a price discrepancy between the two contracts with a ratio.

The Pegged to Benchmark order is similar to the Pegged to Stock order for options, except that the Pegged to Benchmark allows you to specify any asset type as the reference (benchmark) contract for a stock or option order. Both the primary and reference contracts must use the same currency.

The Pegged to Benchmark order continually adjusts the primary order price by the specified offset based on movement in the price of the user-defined reference contract. To determine a change in price, the reference contract price is subtracted from the "Starting" reference price (or the current NBBO midpoint if no starting price is defined). You may also enter a high/low stock price range that triggers a cancel request when reached.

Example

A pegged-to-midpoint order provides a means for traders to seek a price improvement at the midpoint of the National Best Bid and Offer (NBBO). The price automatically adjusts to peg the midpoint as the market moves in any direction.

• For U.S. stock orders you must select direct routing to submit a pegged-to-midpoint order.
• For U.S. equity and index options, you must direct route your order IBUSOPT to use the pegged-to-midpoint order type.

Most venues (including but not limited to NASDAQ/ISLAND) do not accept an offset from the midpoint.

For orders with no offset, you must specify the value "0" or "0.0" in TWS. Note that some exchanges may allow an offset amount in the future.

You can also define a price cap using the Limit Price field, to prevent your order from being executed above or below a specified price level.

A Pegged to Stock order continually adjusts the option order price by the product of a signed user-define delta and the change of the option's underlying stock price. The delta is entered as an absolute and assumed to be positive for calls and negative for puts. A buy or sell call order price is determined by adding the delta times a change in an underlying stock price to a specified starting price for the call. To determine the change in price, the stock reference price is subtracted from the current NBBO midpoint. The Stock Reference Price can be defined by the user, or defaults to the NBBO midpoint at the time of the order if no reference price is entered. You may also enter a high/low stock price range which cancels the order when reached. The delta times the change in stock price will be rounded to the nearest penny in favor of the order.

Users can limit the contribution of their order to overall average daily volume in order to minimize impact. Clients can set a value between 1-50% to control their participation between stated start and end times. Order quantity and volume distribution over the day is determined using the target percent of volume you entered along with continuously updated volume forecasts calculated from TWS market data.

In addition, the algo can be set to avoid taking liquidity, which may help avoid liquidity-taker fees and could result in liquidity-adding rebates. By checking the Attempt to never take liquidity box, the algo is discouraged from hitting the bid or lifting the offer if possible. However, this may also result in greater deviations from the benchmark, and in partial fills, since the posted bid/offer may not always get hit as the price moves up/down. IBKR will use best efforts not to take liquidity when this box is checked, however, there will be times that it cannot be avoided.

This algo allows you to participate in volume at a user-defined rate that varies over time depending on the market price of the security. This algo allows you to buy more aggressively when the price is low and be more passive as the price increases, and just the opposite for sell orders. The order quantity and volume distribution over the time during which the order is active is determined using the target percent of volume you entered along with continuously updated volume forecasts calculated from TWS market data.

An order type available for certain multi-leg combinations, and when used with a non-guaranteed combination order it could help to increase the chances of all legs in the order being filled. Although the order type uses the term “Relative,” this refers to the behavior of the limit order initially submitted, which is pegged to the bid for a buy and to the ask for a sell similar to a Relative order, in an attempt to add rather than remove liquidity. Initially one or more legs are submitted as limit orders, but if the first leg fills or partially fills, the remaining legs are resubmitted as market orders.

Relative (a.k.a. Pegged-to-Primary) orders provide a means for traders to seek a more aggressive price than the National Best Bid and Offer (NBBO). By acting as liquidity providers and placing more aggressive bids and offers than the current best bids and offers, traders increase their odds of filling their orders. Quotes are automatically adjusted as the markets move, to remain aggressive.

• Directed orders, including orders sent to IBKR ATS, will float both ways with the market.
• Smart-Routed buy orders are pegged to the NBB by a more aggressive offset. If the NBB moves up, your bid will also move up. If the NBB moves down, there will be no adjustment.
• Smart-Routed sell orders are pegged to the NBO by a more aggressive offset. If the NBO moves down, your offer will also move down. If the NBO moves up, there will be no adjustment.

In addition to the offset, you can define an absolute cap that works like a limit price, and will prevent your order from being executed above or below a specified price level.

For orders routed to IBKR ATS, the system automatically caps the order price at the "opposite" side of the BBO plus/minus 1 tick. For example, if the NBBO is $10.10 - $10.12 and you submit a RELATIVE buy order directed to IBKR ATS and with an $0.02 offset, with no cap the order price would be the bid ($10.10) + offset ($0.02) = $10.12. To keep the order more aggressive, we apply the price cap at the opposite side of the BBO (in this case as the offer) minus 1 tick, or $10.12 - $0.01 = $10.11.

Orders with a "0" offset are submitted as limit orders at the best bid/ask and will move up and down with the market to continue to match the inside quote. You must specify the value "0" or "0.0" in TWS to submit an order with no offset.

If you submit a relative order with a percentage offset, you are instructing us to calculate an order price that is consistent with the offset, but that also complies with applicable tick increments. Therefore we will calculate the order price rounded to the appropriate tick increment (e.g., pennies for a U.S. stock trading at a price over $1.00). Buy orders will be rounded down to the nearest acceptable tick increment and sell orders will be rounded up.

The Retail Price Improvement (RPI) order is a liquidity-adding order that works within the parameters of the NASDAQ Retail Price Improvement program. This program allows qualified stock orders to fill against eligible, hidden RPI orders that offer price improvement over the current best bid and offer.

Customers submitting an RPI order must specify an offset (which is the minimum price improvement amount) of at least 0.001. The order's limit price is used as the price cap for the order which, when submitted, acts like a relative order and is pegged to the best bid (for a buy) and the best offer (for a sell) plus or minus the required offset. Once submitted, the RPI order is routed to a separate book at the NASDAQ where it is eligible to interact with qualified orders.

The ScaleTrader tool helps to ensure that larger sized trades, including combinations, are not subject to increasingly deteriorating prices. Consider the alternatives. You could submit a basic block order, and watch as acceptable prices at the start of execution rapidly give way to deteriorating prices as the market moves. Or, you could split up your order manually, and submit multiple, smaller orders at various price levels to minimize your footprint, but this requires time, effort and constant monitoring. ScaleTrader uses price and size determinants that you specify to automatically scale your large volume order into smaller, incrementally-priced components, and submits them as limit orders.

In addition, you can set a "scale offset" amount that ScaleTrader uses to submit opposite-side profit taking orders against your original order components. This allows position traders to pre-define the minimum amount of profitability acceptable for exiting a position. You can track the progress of the trade from the Scale Progress window, accessible from the right-click menu on a scale order line.

If prices move and a component of the order becomes unmarketable, the entire order waits until the component price becomes marketable. You CANNOT modify any component of the order. You may use the Good-Till-Cancelled time in force to allow the order to continue working through an unmarketable component. You may also elect to Restart the scale series if the order is cancelled, and Restore the filled profit order quantity to the original scale order.

The Snap to Market (SNAP MKT) order is similar to a pegged order, as the original order price is determined by the current bid/ask plus or minus an offset. But unlike the pegged order price, the "snap to" order price doesn't continue to peg as the price moves.

The trader creates the order by selecting SNAP MKT as the order type, then enters an offset amount which computes the active limit price as follows:

Sell order price = Bid price + offset amount
Buy order price = Ask price - offset amount

The Snap to Market order is simulated on all exchanges.

The Snap to Midpoint (SNAP MID) order is similar to a pegged order, as the original order price is determined by the current bid/ask plus or minus an offset. But unlike the pegged order price, the "snap to" order price doesn't continue to peg as the price moves.

The trader creates the order by selecting SNAP MID as the order type, then enters an offset amount which computes the active limit price as follows:

Sell order price = Midpoint of the Bid/Ask price + offset amount
Buy order price = Midpoint of the Bid/Ask price - offset amount

The Snap to Midpoint order is simulated on all exchanges.

The Snap to Primary (SNAP PRIM) order is similar to a pegged order, as the original order price is determined by the current bid/ask plus or minus an offset. But unlike the pegged order price, the "snap to" order price doesn't continue to peg as the price moves.

The trader creates the order by selecting SNAP PRIM as the order type, then enters an offset amount which computes the active limit price as follows:

Sell order price = Ask price - offset amount
Buy order price = Bid price + offset amount

The Snap to Primary order is simulated on all exchanges.

A spread order is a combination of individual orders (legs) that work together to create a single trading strategy. Spread types include futures spreads, and combinations of option/option, option/stock and stock/stock on the same or multiple underlyings.

When your spread order is transmitted, IBKR SmartRouting will compare native spread prices when available (i.e. ISE) with implied spread prices from all available option and stock exchanges and route each leg independently to the best priced location(s).

If your order is marketable, IBKR will route the spread order or each leg of the spread independently to the best possible venue(s). Non-marketable spread orders native to the ISE on a single underlying will be temporarily routed to the ISE book, while non-marketable orders that are not native to the ISE will remain at IBKR. From that moment on, IBKR SmartRouting will continuously evaluate changing market conditions and will dynamically route and re-route based on this evaluation to achieve optimal execution.

When using the ComboTrader Generic tab, only two-legged spreads will be considered valid unless the spread is natively traded on at least one exchange. To ensure that your multi-leg spread is valid, use the Strategy templates on the Single or Multiple tabs.

You can create many different kinds of combination spread orders, and there are several ways you can create them in TWS, including via the ComboTrader, the SpreadTrader and the OptionTrader.

A Stop order is an instruction to submit a buy or sell market order if and when the user-specified stop trigger price is attained or penetrated. A Stop order is not guaranteed a specific execution price and may execute significantly away from its stop price. A Sell Stop order is always placed below the current market price and is typically used to limit a loss or protect a profit on a long stock position. A Buy Stop order is always placed above the current market price. It is typically used to limit a loss or help protect a profit on a short sale.

Interactive Brokers may simulate certain order types on its books and submit the order to the exchange when it becomes marketable. The IBKR website contains a page with exchange listings. The linked page for each exchange contains an expandable "Order Types" section, listing the order types submitted using that exchange's native order type and the order types that are simulated by IBKR for that exchange.
See our Exchange Listings.

For stop orders simulated by IB, customers may use IBKR's default trigger methodology or configure their own customized trigger methodology. Customers should be aware that IBKR's default trigger method for stop orders can differ depending on the type of product (e.g., stocks, options, futures, etc.).

To modify the trigger method for a specific stop order, customers can access the "Trigger Method" field in the order preset. Customers may also modify the default trigger method for all Stop orders by selecting the "Edit" menu item on their Trade Workstation trading screen and then selecting the "Trigger Method" dropdown list from the TWS Global Configuration menu item. For more information on modifying the trigger method, as well as a detailed description of the default trigger method for each product type, please see the TWS User's Guide section entitled "Modify the Stop Trigger Method" located here.

You can attach one-time adjustments to stop, stop limit, trailing stop and trailing stop limit orders. When you attach an adjusted order, you set a trigger price that triggers a modification of the original (or parent) order, instead of triggering order transmission.

Preset

Hotkey

Note that you can adjust any of the parent stop order types to any other stop order type; for example if you set up a Stop Limit, you can attach the one-time adjustment to change the order to a Trailing Stop, or if you start with a Stop order the adjustment can change it to a Trailing Stop Limit order.

In the example below, we show you how to attach an Adjusted Stop Limit order to a Stop order. You can attach adjusted orders using the Order Ticket or by customizing the fields on your trading window. In this example, we use the TWS Order Ticket.

A Stop-Limit order is an instruction to submit a buy or sell limit order when the user-specified stop trigger price is attained or penetrated. The order has two basic components: the stop price and the limit price. When a trade has occurred at or through the stop price, the order becomes executable and enters the market as a limit order, which is an order to buy or sell at a specified price or better.

A Stop-Limit eliminates the price risk associated with a stop order where the execution price cannot be guaranteed, but exposes the investor to the risk that the order may never fill even if the stop price is reached. The investor could "miss the market" altogether.

Interactive Brokers may simulate certain order types on its books and submit the order to the exchange when it becomes marketable. The IBKR website contains a page with exchange listings. The linked page for each exchange contains an expandable "Order Types" section, listing the order types submitted using that exchange's native order type and the order types that are simulated by IBKR for that exchange.
See our Exchange Listings.

For stop-limit orders simulated by IB, customers may use IBKR's default trigger methodology or configure their own customized trigger methodology. Customers should be aware that IBKR's default trigger method for stop-limit orders may differ depending on the type of product (e.g., stocks, options, futures, etc.).

To modify the trigger method for a specific stop-limit order, customers can access the "Trigger Method" field in the order preset. Customers can also modify the default trigger method for all Stop orders by selecting the "Edit" menu item on their Trade Workstation trading screen and then selecting the "Trigger Method" dropdown list from the TWS Global Configuration menu item.

A Stop with Protection order combines the functionality of a stop limit order with a market with protection order. The order is set to trigger at a specified stop price. When the stop price is penetrated, the order is triggered as a market with protection order, which means that it will fill within a specified protected price range equal to the trigger price +/- the exchange-defined protection point range. Any portion of the order that does not fill within this protected range is submitted as a limit order at the exchange-defined trigger price +/- the protection points. Note, as the Stop with Protection order type is a simulated order type and thus handled on a best efforts basis, it is possible no execution may occur in the event the market price immediately moves away from the trigger price.

Order Type In Depth - Stop with Protection Buy Order

Sweep-to-fill orders are useful when a trader values speed of execution over price. A sweep-to-fill order identifies the best price and the exact quantity offered/available at that price, and transmits the corresponding portion of your order for immediate execution. Simultaneously it identifies the next best price and quantity offered/available, and submits the matching quantity of your order for immediate execution.

Example

Order Type In Depth - Sweep-to-Fill Buy Order

A sell trailing stop order sets the stop price at a fixed amount below the market price with an attached "trailing" amount. As the market price rises, the stop price rises by the trail amount, but if the stock price falls, the stop loss price doesn't change, and a market order is submitted when the stop price is hit. This technique is designed to allow an investor to specify a limit on the maximum possible loss, without setting a limit on the maximum possible gain. "Buy" trailing stop orders are the mirror image of sell trailing stop orders, and are most appropriate for use in falling markets.

IB may simulate stop orders on exchanges. For details on how IBKR manages stop orders, click here.

A trailing stop limit order is designed to allow an investor to specify a limit on the maximum possible loss, without setting a limit on the maximum possible gain. A SELL trailing stop limit moves with the market price, and continually recalculates the stop trigger price at a fixed amount below the market price, based on the user-defined "trailing" amount. The limit order price is also continually recalculated based on the limit offset. As the market price rises, both the stop price and the limit price rise by the trail amount and limit offset respectively, but if the stock price falls, the stop price remains unchanged, and when the stop price is hit a limit order is submitted at the last calculated limit price. A "Buy" trailing stop limit order is the mirror image of a sell trailing stop limit, and is generally used in falling markets.

IB may simulate stop-limit orders on exchanges. For details on how IBKR manages stop-limit orders, click here.