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Anyone using IB to trade should closely examine the manner in which they
handle stop loss orders on futures and stocks - I no longer have the links
but they do post the details on their web site. I used their TW for some 6-8
months several years ago for scalping the emini and they supported stops
when they were not supported on Globex. I subsequently closed the account
when my emini trading activity dropped off, however I am once again doing a
good bit of emini trading and was quite interested in their new Java applet.
In the course of my re-investigation of IB, I learned that the IB system
continues to simulate Globex stops rather than use the now fully functional
stops on Globex2.
What does this mean? Lets suppose you place your stop with IB at point which
is likely to attrace a lot of stops. My (non-IB) stop will be held on
Globex2 queued for execution in order of receipt. Your IB stop will be sent
to Globex as a (psuedo) market order when the IB receives notice (via quote
stream) that the price has been hit on Globex. Bottom line is that your stop
will go to the end of the queue and incur more slippage, particularly in
fast markets. Customers who trade the emini with IB should be aware that
slippage costs may far exceed the savings on low commissions.
Inquiries to IB regarding their plans to replace the simulated stop system
with true Globex2 stop execution elicited the information that there are no
plans to change the system.
Earl
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