Shorting QQQ on IB et al.

[dkamp]

First, I'd like to say that I just started using IB and am very happy with their TWS and customer support, especially when compared to several other brokers I've tried over the past year.

However, I was surprised to hear that their software requires an uptick for all short orders, even those for stocks such as QQQ which are exempt. I don't recall this ever being an issue with other brokers. Is this in the same category as their refusal to support trailing stops?

What experiences have others had? (With Datek, for example, QQQ short orders always go through the Amex, where they sit behind all long orders, taking 30-60 seconds to execute.)

 

[tntneo]

no uptick rule for QQQ and other holders at IB.
Use the island routing [or instinet]. island is the best unless you move a lot volume. never use AMEX or BEST.

neo

 

[dkamp]

neo, I've asked IB's help desk about this twice, and each time they responded the same way: their software imposes the uptick rule whether a particular stock is exempt from it or not.

Are you sure that this is not true, or perhaps its just never much of a problem due to the volatility of QQQ prices? In which case you might only notice the problem when trying to add to a QQQ short position during a plunge.

 

[tntneo]

well, my experience is I could ALWAYS sell short at bid. It is true QQQ is so volatile maybe the uptick rule was fullfilled. But I don't think so, as far as I remember, I did chase it down once or twice [although I should not !].
Again, this on Island only of course.

neo

 

[Turok]

I just ran several tests routing Isld for QQQ.

There is no downtick enforcement for QQQ on my IB TWS.4.0

I can short when it is running down hard.

JB

 

[crazy_trader]

You don't need a uptick to short
QQQ
BHH
BBH

or those indices stock that trade on AMEX.

 

[dkamp]

Great! Just trying to distinguish between what the rules should be vs. the mysterious world of proprietary broker order routing software...

JB, thanks for the bit of experimention.

 

[Turok]

>JB, thanks for the bit of experimention.

No worries man. The beauty of those one buck IB commissions is that you can experiment and learn.

JB

 

[def]

I confirmed that IB does not have any short sale restrictions on the ETF's (QQQ etc). The person on the help desk who passed the info was mistaken.