My problem with Interactive Brokers

soren_lorensen · 31 August 2009

Hi there, just wanted to make some of ASF posters aware of this issue, maybe this has come up before but i haven't seen it.

Be aware if certain stocks move greater than 10% of their open/close during the day, IB operates an automatic filtering system to delay order going to market. They appear to have an algorithm that automatically sets this up. My description there is a simplification of course but essentially they have automatic filtering system that delays order entering the market to keep the underling from moving to far and too fast

Potentially this is disasterous with day trading more speculative and even non-speccy stocks.

In my own case, i'm a recent new user of IB and do enjoy the cheap brokerage and other order types that the mainstream broker charge a motza for. But in this particular case my sell order would not execute.

I bought 56c stock and it quickly went to 63 or 64 c so i set a sell stop at 60c anyhow it dropped below this and order appeared to be acknowledged but it never executed. I thought something was wrong with the order so tried it again, then stop limit, then sell limit and sell market, still wouldn't sell the damn thing. Never appeared in DOM either

The upshot - appears that with fast moving stock, your order may not execute and you will have to call a designated represenatative to have your order executed for you. How likely is that to happen, They then have to agree to moving the floor/ceiling for that stock to enable your order to execute. My order didn't operate all afternoon.

I guess there had to be a catch with the cheap brokerage, and i guess i have just found it.

Pity, i'm now down a shed load because of this, i should have sold at a small loss instead of a big one, i dont blame this on IB as i could have sold a day later, PITY though because if IB had of worked i would have made a nice profit.

instead another one bites the dust

any others come across this one? any success getting the designated trading representative to alter the floor/ceiling???

app2 · 4 September 2009

I have come across this too and it has cost me money too.

Quite frankly it stinks. It may be alright if you are just dealing in TLS but a lot of small cap companies move 10% either way in a flash and you NEED to be agile to take advantage of this.

I had a position move against me 15% on bad news and I couldn't get out. It is now down 45% and hurting.

To make things worse, the ORDER STATUS column in TWS states that the order is on the exchange, which is bollocks. They should at least give a different status saying that you need to talk to an operator to place the order.

A.

shortlist · 9 September 2009

soren_lorensen said:
Hi there, just wanted to make some of ASF posters aware of this issue, maybe this has come up before but i haven't seen it.

Be aware if certain stocks move greater than 10% of their open/close during the day, IB operates an automatic filtering system to delay order going to market. They appear to have an algorithm that automatically sets this up. My description there is a simplification of course but essentially they have automatic filtering system that delays order entering the market to keep the underling from moving to far and too fast

Potentially this is disasterous with day trading more speculative and even non-speccy stocks.

In my own case, i'm a recent new user of IB and do enjoy the cheap brokerage and other order types that the mainstream broker charge a motza for. But in this particular case my sell order would not execute.

I bought 56c stock and it quickly went to 63 or 64 c so i set a sell stop at 60c anyhow it dropped below this and order appeared to be acknowledged but it never executed. I thought something was wrong with the order so tried it again, then stop limit, then sell limit and sell market, still wouldn't sell the damn thing. Never appeared in DOM either

The upshot - appears that with fast moving stock, your order may not execute and you will have to call a designated represenatative to have your order executed for you. How likely is that to happen, They then have to agree to moving the floor/ceiling for that stock to enable your order to execute. My order didn't operate all afternoon.

I guess there had to be a catch with the cheap brokerage, and i guess i have just found it.

Pity, i'm now down a shed load because of this, i should have sold at a small loss instead of a big one, i dont blame this on IB as i could have sold a day later, PITY though because if IB had of worked i would have made a nice profit.

instead another one bites the dust

any others come across this one? any success getting the designated trading representative to alter the floor/ceiling???

I'm looking at IB to start a little trading with. Also looking at Commsec and Etrade. I'm very new at all this, so maybe I just don't get it, but why not sell before the 10% filtering thing kicks in? I know you won't maximise your potential gains this way, but how often do you get a 10% increase in stock anyway?

soren_lorensen · 9 September 2009

shortlist said:
I'm looking at IB to start a little trading with. Also looking at Commsec and Etrade. I'm very new at all this, so maybe I just don't get it, but why not sell before the 10% filtering thing kicks in? I know you won't maximise your potential gains this way, but how often do you get a 10% increase in stock anyway?

not very often if you are buying blue chip, but quite often if purchasing speculative stock

skyQuake · 10 September 2009

This problem has been addressed in the IB thread. Always worth calling them up if you have problems.

OzTrade · 10 September 2009

Soren,
I think you need to use a STOP LIMIT order with a wider limit.
The same has happened to me? Stop went off and I was left behind on the offer, the market never came back to take out the offer hence I was left behind and executed manually at market?
Try using an order with a wider STOP limit and monitor how the market trades, hence if news drives the market down you may not get filled if there are no bids in the market place, hence using a wider STOP limit helps if you can not watch the market all day.
Alternatively I suggest you speak with IB and let them know what happened, they are more then helpful most of the time.

Nick Radge · 10 September 2009

fyi...

Hi Nick,

We have had a number of cases where customers have placed large orders and moved the price of a stock significantly. This has caused us considerable problems with the ASX who demanded that we put certain filters on the orders to prevent this from happening. We implemented very strong filters to prevent any such issue from happening again, otherwise we risk not being able to offer access to the exchange.

We have designed new filters which will fix the issues that you mention below, however, before we implement these they have to go through an independent audit and then be approved by the ASX. This process has taken much longer than expected.

With the new filters, your problems with the opening auction will be resolved. Currently in the opening auction you are restricted to 10% from the reference price, which is usually the last close, however this 10% is reached by stepping up an order 2% every 60 seconds. When the new filters are implemented you will be able to place an order up to 15% away from the reference price, and there will be no step-up.

Assuming the filters are approved we will provide a basic explanation of them. However, the reason why CS cannot provide actual details is because it is very complex and covers a 17 page document.

We are working hard to get the approval and make the changes asap, as we are very aware of the problems that the current filters are casuing.

Best Regards

Steve M. Kelsey, CFA, CMT
Managing Director
Interactive Brokers LLC

soren_lorensen · 10 September 2009

OzTrade said:
Soren,
I think you need to use a STOP LIMIT order with a wider limit.
The same has happened to me? Stop went off and I was left behind on the offer, the market never came back to take out the offer hence I was left behind and executed manually at market?
Try using an order with a wider STOP limit and monitor how the market trades, hence if news drives the market down you may not get filled if there are no bids in the market place, hence using a wider STOP limit helps if you can not watch the market all day.
Alternatively I suggest you speak with IB and let them know what happened, they are more then helpful most of the time.

hi oztrader, the problem wasn't stop limit, since i tried, sell stop and sell market orders and none of these worked

soren_lorensen · 10 September 2009

Nick Radge said:
fyi...

Hi Nick,

We have had a number of cases where customers have placed large orders and moved the price of a stock significantly. This has caused us considerable problems with the ASX who demanded that we put certain filters on the orders to prevent this from happening. We implemented very strong filters to prevent any such issue from happening again, otherwise we risk not being able to offer access to the exchange.

We have designed new filters which will fix the issues that you mention below, however, before we implement these they have to go through an independent audit and then be approved by the ASX. This process has taken much longer than expected.

With the new filters, your problems with the opening auction will be resolved. Currently in the opening auction you are restricted to 10% from the reference price, which is usually the last close, however this 10% is reached by stepping up an order 2% every 60 seconds. When the new filters are implemented you will be able to place an order up to 15% away from the reference price, and there will be no step-up.

Assuming the filters are approved we will provide a basic explanation of them. However, the reason why CS cannot provide actual details is because it is very complex and covers a 17 page document.

We are working hard to get the approval and make the changes asap, as we are very aware of the problems that the current filters are casuing.

Best Regards

Steve M. Kelsey, CFA, CMT
Managing Director
Interactive Brokers LLC

thanks nick, i'm not planning to try this with IB again since they have this filtering system operating, i'll stick with stocks on asx 300, i dont forsee having this issue in future. On the other hand the stock i was looking to offload has bounced back somewhat and i'm not losing out by much at present. Gotta love tha cheap brokerage.

I do much prefer IB to nab or etrade and i've tried both.

paulchow2k · 24 September 2009

Thanks for the update Nick,
This is the issue since I've reported to the trade desk months ago. I was recently informed by someone in HK that ASX is taking their time [read quarters/yrs] approving these changes or just not playing ball.

But thanks for the update. I'm not holding my breath.

regards

Paul

This document might explain why:

http://www.heraldsun.com.au/busines...nalty-for-fortis/story-e6frfinf-1225760971518

Nick Radge said:
fyi...

Hi Nick,

We have had a number of cases where customers have placed large orders and moved the price of a stock significantly. This has caused us considerable problems with the ASX who demanded that we put certain filters on the orders to prevent this from happening. We implemented very strong filters to prevent any such issue from happening again, otherwise we risk not being able to offer access to the exchange.

We have designed new filters which will fix the issues that you mention below, however, before we implement these they have to go through an independent audit and then be approved by the ASX. This process has taken much longer than expected.

With the new filters, your problems with the opening auction will be resolved. Currently in the opening auction you are restricted to 10% from the reference price, which is usually the last close, however this 10% is reached by stepping up an order 2% every 60 seconds. When the new filters are implemented you will be able to place an order up to 15% away from the reference price, and there will be no step-up.

Assuming the filters are approved we will provide a basic explanation of them. However, the reason why CS cannot provide actual details is because it is very complex and covers a 17 page document.

We are working hard to get the approval and make the changes asap, as we are very aware of the problems that the current filters are casuing.

Best Regards

Steve M. Kelsey, CFA, CMT
Managing Director
Interactive Brokers LLC

Wysiwyg · 8 February 2015

soren_lorensen said:
In my own case, i'm a recent new user of IB and do enjoy the cheap brokerage and other order types that the mainstream broker charge a motza for. But in this particular case my sell order would not execute.

I bought 56c stock and it quickly went to 63 or 64 c so i set a sell stop at 60c anyhow it dropped below this and order appeared to be acknowledged but it never executed. I thought something was wrong with the order so tried it again, then stop limit, then sell limit and sell market, still wouldn't sell the damn thing. Never appeared in DOM either

Is this still an issue with IB? For example I hold shares in an ASX stock that rises 20% on news and there are buyers visible in market depth at that 20% higher price for the quantity I hold. Can I sell immediately?

My problem with Interactive Brokers

soren_lorensen

app2

shortlist

soren_lorensen

skyQuake

OzTrade

Nick Radge

soren_lorensen

soren_lorensen

paulchow2k

Wysiwyg

Everyone wants money

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