"Something Disturbing Happened" - Words Of Warning from futures trader

[Low Salubrity Thug]

They actually do, you use "STOP PRT", the problem is my front end doesn't support it.

https://www.danielstrading.com/stra...-stops-become-limit-orders-on-cme-globex-ice/

I would advise anyone who is serious about trading to read (and understand) all the relevant product and platform documentation provided by their exchange.

This guy doesn't understand Globex. His first sentence is factually incorrect. Globex stop market orders DO become market orders when triggered. The protection applies to the market order. The stop trigger is irrelevant.

 

[i960]

I would advise anyone who is serious about trading to read (and understand) all the relevant product and platform documentation provided by their exchange.

This guy doesn't understand Globex. His first sentence is factually incorrect. Globex stop market orders DO become market orders when triggered. The protection applies to the market order. The stop trigger is irrelevant.

I don't know who you're calling out here, me or the original author? Your point is pedantic and not really the issue here. The issue at hand is that one cannot send a native stop market order to Globex or ICE, period. There are NO "Globex stop market" orders at all. If what you meant was stop protect orders, then yes, that's the other option aside from a stop limit.

The entire point is that if you want your broker to send your stop to the exchange (rather than their own servers) it needs to be either a stop limit or a stop protect and nothing other than those two choices because anything else is not native.

Now the reason I say you're being pedantic here has to do with this:

This guy doesn't understand Globex. His first sentence is factually incorrect.

And the guy said this:

"When stops are triggered on the CME Globex and ICE systems, they do not become market orders."

Your issue with it is that they are pragmatically market orders in normal market environments - yet the entire point of stop protect is for non-normal market environments. He's technically not even wrong either, this is straight from the Globex reference guide:

Not a damn thing mentioned about market orders, it's a *marketable limit* order with price banding implicitly taken into account.

 

[Low Salubrity Thug]

I don't know who you're calling out here, me or the original author?

I'm not calling out anyone. I'm just stating the facts. Let's not turn this into a pissing match. ET is already awash with enough crap. I was just curious about your claim that IB doesn't submit stop market/stop protection orders to Globex.

Your point is pedantic and not really the issue here. The issue at hand is that one cannot send a native stop market order to Globex or ICE, period. There are NO "Globex stop market" orders at all. If what you meant was stop protect orders, then yes, that's the other option aside from a stop limit.

The name is unimportant. For what it's worth I refer to them as stop market orders because that's the generally understood term in the industry. I even have some old CME technical documents that refer to them as 'Stop Market (With Protection)' orders. My point is that, whatever you call them, when the stop is triggered they are handled in exactly the same way as manually submitted market orders.

The truth is Globex doesn't support market orders in the traditional sense. All Globex market orders are implemented as limit orders with the limit price determined by the protection range. Therefore, to my mind, saying that Globex doesn't support native stop markets is pedantic, since by that logic Globex doesn't support native market orders.

Other exchanges operate different mechanisms and they all have circuit breakers. No electronic trading platform I know of implements market orders in the traditional sense (i.e. possible execution at any price).

Anyway, back to my original point...is it really not possible to submit stop market/protection orders to Globex using IB?

EDIT: Just dug out my link to the page explaining CME price banding logic. Might be helpful to other people that stumble across this thread. It's worth noting that the CME GCC can alter the PBVR during the day.

 

[i960]

Anyway, back to my original point...is it really not possible to submit stop market/protection orders to Globex using IB?

It's totally possible - you just have to use the specific STOP PRT order which not all front ends support. TWS supports it but many don't use that as their trading platform. What I was originally implying is that IB shouldn't bother holding market stops on their servers and should simply translate it to a STOP PRT order held on the exchange. There is of course a conflict here because an IB held market stop is really a "GTFO" order but it'll still turn into a protected stop the second it's triggered so they shouldn't even bother IMO.

 

[CBC]

So does this band affect market orders? I havn't seen or read into it, but if it rejects limit orders been sent that are outside the band, will it reject a market order that would gobble up all the DOM quotes and then be outside of the "band". If some spoofer wanted to manipulate the market, which this rule is trying to stop, then some spoofer could just send through a market order with enough volume that would take out all the bids /offers for say 10 strikes. Even though the band might be set a 5 strikes.

And if so then it might reject a stop market order that would be on top of any bid / ask volume that would be outside of the band.

 

[Low Salubrity Thug]

It's totally possible - you just have to use the specific STOP PRT order which not all front ends support. TWS supports it but many don't use that as their trading platform. What I was originally implying is that IB shouldn't bother holding market stops on their servers and should simply translate it to a STOP PRT order held on the exchange. There is of course a conflict here because an IB held market stop is really a "GTFO" order but it'll still turn into a protected stop the second it's triggered so they shouldn't even bother IMO.

Ah, now I understand. Yes indeed, doesn't sound like IB are doing their clients any favours there.