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Except you have the hassle/delay of having to always enter two
separate prices, one for the stop and one for the limit at a far
enough away price to guarantee a fill (to simulate a stop order). And
you always have to remember to do it this way. Maybe this isn't a
big deal to some folk but it's an inconvenience I can do without.
But the other issue is: Can you QUICKLY "modify" a stop-limit order
with two different prices (i.e. change the stop price frequently
while keeping the same limit price ....for use as a trailing stop)?
With stop-limit orders, you normally have to straight cancel them and
place a new one. Is that not true also of IB? This causes delays
compared to modifying a plain stop order. When you're trailing your
stop-loss tight behind the market to lock in profits you may need to
quickly modify the stop price. Having to cancel the order and place
a new one every time is a delay which can cost you money (e.g. the
market stops you out before you've had time to do this). Therefore,
if you use stop-limits instead of stops with IB, maybe you are
solving one problem (not relying on IB servers) only to create
another (inability to use a fast trailing stop)?
For an extra buck commish you can have plain stops rest on Globex
(which can be modified very quickly) and have decent phone support
when you need it. You pays your money you takes your choice.
S.
On Tue, 11 Feb 2003 09:01:53 -0500, AndrewN wrote:
>IB has a great trading platform for very many reasons that I won't
>go into
>now. As far as queuing of stops is concerned, I can't remember the
>last time
>I had any slippage on a stop. As for any concerns about stops not
>being
>elected by IB, just place a stop limit order. These ARE sent to
>Globex.
>Problem solved.
>
>Andrew
>
>
>-----Original Message-----
>From: Simon Campbell [mailto:simtrader@xxxxxxxxxx]
>Sent: Tuesday, February 11, 2003 7:18 AM
>To: Omega List
>Subject: Re: IB TWS problem with stops
>
>
>Why any futures trader uses IB is beyond me given the way they
handle
>stop orders. Unless they've finally made the long-awaited change of
>sending stops native to Globex (judging by the comments it seems
not)
>then in my opinion, it's a mess because your stop is only held on IB
>servers which means:
>
>- your order will only get sent to Globex as a market order when the
>stop price is triggered. In the best of cirucmstances (when it
works)
>this means that your fill takes the lowest priority. All stops at
>the same price held directly on Globex will be filled before your
>order is. Orders held native on globex are timestamped and queued.
>Even if you sent your IB stop order four hours earlier, Globex
>doesn't even know about it until after the price is hit ...because
>only then does IB actually send it off. Bottom line? time lag in
>getting the order off (even if <1 second) and bottom of the pile
>priority, all mean increased risk of a tick slippage. At $12.50 ES,
>what good is your extra $1 commission saving?
>
>- Your stop relies on IBs own datafeed to trigger it and send it to
>Globex. A problem with their datafeed means your order can go
>unexecuted. My understanding is that it's not a true streaming
>datafeed but rather a snapshot every second or so. What if the
>snapshot misses your stop price? Or what if the feed goes down for
>10 seconds around the time your stop would be triggered? Your stop
>goes unfilled that's what!
>
>Contrast this to the situation where your stop is held directly on
>Globex. It's been timestamped and received by the entity actually
>doing the execution. It will receive preferred filling. Your PC
>could blow up, your brokers servers could explode ...and nonetheless
>you are guaranteed to get executed. The worst that happens is that
>your brokers order software goes iffy (it happens to them all) and
it
>says your order is still working. But if you KNOW your order was
>sent to Globex you have total peace of mind that the truth is you
>were executed and they just aren't showing it yet. You can relax
that
>any software glitch has no material impact on you. Contrast that to
>IB where you are sitting there with a "working" order and wondering:
>"was I filled?", "is the system just slow?", "am I still in the
>market?". Who needs that hassle in their life?
>
>To me, it's such a basic fundamental to have your stop orders only
>rest on Globex servers ...trading with them on a brokers' servers or
>keeping them on your PC is just insanity. Pay an extra buck or two
>and use a J-Trader platform* that holds stops directly on Globex.
>IMHO the commission savings of IB just aren't worth the extra risk
of
>$12.50 slippage, the extra risk of unexecuted orders, and the mental
>stress it puts on your ability to successfully trade, when problems
>do occur. There's enough stress in trading without worrying whether
>your orders are filled or not.
>
>S.
>*Not all versions of J-Trader can send stops directly to Globex
(some
>versions only hold them on your PC), but stand alone version
>2.8.0.6.D does offer this capability.
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