Interactive Brokers: Snap to Midpoint Orders

[andrew black]

Wondering if anyone has been using Snap to Midpoint Orders with Interactive Brokers https://www.interactivebrokers.ca/en/index.php?f=5934 and maybe they can share their experiences.

This is the example:

So, basically an IBM buy order, "SNAP MID" with 0.01 offset.

With bid = 190.32 ans ask = 190.33, midpoint of the Bid/Ask would be 190.325. When you add the 0.01 offset, this would be a buy limit order at 190.335 which is actually higher than the ask.

Is this example stupid or people are actually using it this way?

TIA.

 

[OldDad]

I was curious about limit order price distribution for another reason and here is a short experiment I ran. I picked a fav stock, captured all the raw trades for the day out of Medved Trader plus bid/asks into Excel. CountIf the trades at the bid, then the ask.

The very first one I randomly picked had almost 75% of trades going off in between ... on/near the half penny. I only did one, you might give that a go and note back here.

 

[qlai]

With bid = 190.32 ans ask = 190.33, midpoint of the Bid/Ask would be 190.325. When you add the 0.01 offset, this would be a buy limit order at 190.335 which is actually higher than the ask.

I don't think it works this way. It's designed for large spreads, not to split a penny.
It says that for buy orders, it's mid minus offset, so you can't lift the offer with it.
I assume that if spread is a penny, it will simply join the best bid (assuming offset is zero).

 

[andrew black]

I don't think it works this way. It's designed for large spreads, not to split a penny.
It says that for buy orders, it's mid minus offset, so you can't lift the offer with it.
I assume that if spread is a penny, it will simply join the best bid (assuming offset is zero).

You are right, it is "Buy order price = Midpoint of the Bid/Ask price - offset amount" indeed.

But still doesn't make much sense.