The logic of IB Nasdaq Stop Orders?
- Thread starter stock_punter
- Start date
Grabbit et al:
If you dare be more confused, look at this:
Go to the IB home page>
Trading Information>
Order Types>
Scroll down to stop (orders)>
Click on the blue line which says: "Click here for a detailed explanation of stop orders on NASD and US equity options">
Read step #4.
Either IB is confused or I'm confused or several of us are confused. It still seems incorrect in my way of thinking.
Babak, I belive IB responded to you that they had corrected the wording in the explanation of their stop orders. I believe something is not right here.
BSAM
If you dare be more confused, look at this:
Go to the IB home page>
Trading Information>
Order Types>
Scroll down to stop (orders)>
Click on the blue line which says: "Click here for a detailed explanation of stop orders on NASD and US equity options">
Read step #4.
Either IB is confused or I'm confused or several of us are confused. It still seems incorrect in my way of thinking.
Babak, I belive IB responded to you that they had corrected the wording in the explanation of their stop orders. I believe something is not right here.
BSAM
BSAM,
You're right - confusion complete. I'm gonna call my shrink!
For this means that the e-mailed answer that Babak got from the IB helpdesk guy, was only an easy-way-out-answer as you get so often from these guys, when they won't bother to go into the problem. (Had the same thing in the IB chat yesterday, but that's another story.)
And I think that indeed the way stops are (still) described on the IB homepage is the way it actually goes and always has gone. I'm pretty sure about that, as you can see it happen - if it works at all, that is...
So nothing has changed then?
Now what?
Have a nive weekend anyway.
You're right - confusion complete. I'm gonna call my shrink!
For this means that the e-mailed answer that Babak got from the IB helpdesk guy, was only an easy-way-out-answer as you get so often from these guys, when they won't bother to go into the problem. (Had the same thing in the IB chat yesterday, but that's another story.)
And I think that indeed the way stops are (still) described on the IB homepage is the way it actually goes and always has gone. I'm pretty sure about that, as you can see it happen - if it works at all, that is...
So nothing has changed then?
Now what?
Have a nive weekend anyway.
IB :"Thank you for pointing out our error, it [description of algorithm] has been fixed.
--Steve Sanders (from IB) "
COMMON ,I like IB but this is ridulous!!!We have been talking about this ib stop issue until we got blue in the face and now with one email they tell ohhh thank you for pointing that error out (reverse trigger) .my question is what kind of people are over there and who came up with this algorithm.
--Steve Sanders (from IB) "
COMMON ,I like IB but this is ridulous!!!We have been talking about this ib stop issue until we got blue in the face and now with one email they tell ohhh thank you for pointing that error out (reverse trigger) .my question is what kind of people are over there and who came up with this algorithm.
09-22-01 05:09 PM
I quoted :
"COMMON ,I like IB but this is ridulous!!!We have been talking about this ib stop issue until we got blue in the face and now with one email they tell ohhh thank you for pointing that error out (reverse trigger) .my question is what kind of people are over there and who came up with this algorithm. "
"
ok ,so Babak was refering to the description of algorithm and not changing the actual algorithm ,dhaa!
But still I think the way the algorithm works is reverse of how we trade ,why can't they realize that?Can they explain the logic behind that so" famous" algorithm?
BABAK thanks for the correction
Angela.
I quoted :
"COMMON ,I like IB but this is ridulous!!!We have been talking about this ib stop issue until we got blue in the face and now with one email they tell ohhh thank you for pointing that error out (reverse trigger) .my question is what kind of people are over there and who came up with this algorithm. "
"
ok ,so Babak was refering to the description of algorithm and not changing the actual algorithm ,dhaa!
But still I think the way the algorithm works is reverse of how we trade ,why can't they realize that?Can they explain the logic behind that so" famous" algorithm?
BABAK thanks for the correction
Angela.
Hey, guys.
I have different opiniopn on this.
I believe NASDAQ sell stop is currently elected by two offers, and I like this. It's because of stop gunning which was more popular in 99 and 00 for volitile stocks.
For example, assume current price is 30.20 -- 30.25. My sell stop is 30, and everybody, especially market makers know that there are huge number of stops located in 30. They begin to drop down their bids without reason. Once the bid hit 30, many sell stops are elected. While this is happening offer stays in 30.25, because there is actually no seller. Market moves down to 29.90 and then come back to 30.20 right after that. When I return I see my order was executed at 29.90, the low of the day. I see the lowest offer was 30.25 and the closing price is 31. ....
I've seen and experienced this more than a couple of times. Using IB system, I can often not always avoid this situation.
Just my opinion.
I have different opiniopn on this.
I believe NASDAQ sell stop is currently elected by two offers, and I like this. It's because of stop gunning which was more popular in 99 and 00 for volitile stocks.
For example, assume current price is 30.20 -- 30.25. My sell stop is 30, and everybody, especially market makers know that there are huge number of stops located in 30. They begin to drop down their bids without reason. Once the bid hit 30, many sell stops are elected. While this is happening offer stays in 30.25, because there is actually no seller. Market moves down to 29.90 and then come back to 30.20 right after that. When I return I see my order was executed at 29.90, the low of the day. I see the lowest offer was 30.25 and the closing price is 31. ....
I've seen and experienced this more than a couple of times. Using IB system, I can often not always avoid this situation.
Just my opinion.
Magna
Administrator
TraderWJ,
My sell stop is 30, and everybody, especially market makers know that there are huge number of stops located in 30. They begin to drop down their bids without reason. Once the bid hit 30, many sell stops are elected.
Not an uncommon scenario, and I discovered very early in my trading to never set a sell-stop at any whole dollar amount, and especially at a "0" dollar amount (i.e., 10, 20, 30, etc.) In the days of fractions I generally set at 7/8 and frequently 13/16 (in case they were running stops down 1/8 below whole numbers). With decimals the same type of safety rule applies, and .88 or .89 is much safer than .90 or especially .95.
My sell stop is 30, and everybody, especially market makers know that there are huge number of stops located in 30. They begin to drop down their bids without reason. Once the bid hit 30, many sell stops are elected.
Not an uncommon scenario, and I discovered very early in my trading to never set a sell-stop at any whole dollar amount, and especially at a "0" dollar amount (i.e., 10, 20, 30, etc.) In the days of fractions I generally set at 7/8 and frequently 13/16 (in case they were running stops down 1/8 below whole numbers). With decimals the same type of safety rule applies, and .88 or .89 is much safer than .90 or especially .95.
I agree with avoiding the placement of stops on whole numbers. When I set my stops, it's always behind closest dollar if possible, then 1/2, 1/4, down to the nickel. It's amazing what a penny difference can do when setting stops. I learned after many times of losing $1,000 to save a penny that stop positioning is very important.