Unacceptable Limit Stock Order Handling by IB

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NoVoodooHere

I am posting in this general trading thread because topic is or should be relevant to many of us here. Since IB customer service is not being responsive and is essentially dismissing this incredible flaw in basic trading functionality, I am putting the topic in the spotlight for all to see. That seems to be the only way to get IB tech support to react in a useful manner.

Here is the issue: (Using TWS latest build) applicable to stock orders only (not happening with stock futures or options orders), when using an OCA group to place a bracket order (this is a very basic tool used by daytraders and is requisite of any serious broker/platform): The limit order on the bracket is not “live” on any exchange; it has status “order is being held and monitored” (blue color). This happens even if placing the limit inside the bid/ask spread INCREDIBLE! In order for the order to fill, the bid (for example on a limit sell order) has to rise to the limit price, & the order is kicked into an exchange and fills (if ther is still a bidder). This is FAR from the way a limit order should be handled, it is a quasi-stop order and is certainly not a live order offered to the marketplace. Obviously this limit order treatment is not acceptable.

I wonder if I am the only one having a bizzare bug or if this is a systemic defect. Please feel free to chime in. I should add that I am using an advisor account with several sub-account groups when placing trades (no reason this should make a difference other than possibly creating a glitch).

Of course the nefarious conclusion would be that these are HFT’d in house!

Documentation of IB customer service response:

Attempt 1: about one hour on chat, and transferred around to several departments, basically ignore customer and he might go away treatment – No rational response whatsoever.

Attempt 2: about one hour on chat, about 3 work days ago, culminating in tech support acknowledging abnormal behavior and an “escalation” for further review with tracking number. Of course, nothing in the way of a reply so far, and I seriously doubt anything will come of it.
 
not so fast....

what is not normal behavior here? Why can't a limit and even the stop order not rest on the broker's server instead of on the exchange. I am not saying it has to be that way but I am saying this is nothing unusual at all. In fact you can with some IB order types choose whether you want an exchange supported order type to rest at the exchange or with the broker.


NoVoodooHere said:
I am posting in this general trading thread because topic is or should be relevant to many of us here. Since IB customer service is not being responsive and is essentially dismissing this incredible flaw in basic trading functionality, I am putting the topic in the spotlight for all to see. That seems to be the only way to get IB tech support to react in a useful manner.

Here is the issue: (Using TWS latest build) applicable to stock orders only (not happening with stock futures or options orders), when using an OCA group to place a bracket order (this is a very basic tool used by daytraders and is requisite of any serious broker/platform): The limit order on the bracket is not “live” on any exchange; it has status “order is being held and monitored” (blue color). This happens even if placing the limit inside the bid/ask spread INCREDIBLE! In order for the order to fill, the bid (for example on a limit sell order) has to rise to the limit price, & the order is kicked into an exchange and fills (if ther is still a bidder). This is FAR from the way a limit order should be handled, it is a quasi-stop order and is certainly not a live order offered to the marketplace. Obviously this limit order treatment is not acceptable.

I wonder if I am the only one having a bizzare bug or if this is a systemic defect. Please feel free to chime in. I should add that I am using an advisor account with several sub-account groups when placing trades (no reason this should make a difference other than possibly creating a glitch).

Of course the nefarious conclusion would be that these are HFT’d in house!

Documentation of IB customer service response:

Attempt 1: about one hour on chat, and transferred around to several departments, basically ignore customer and he might go away treatment – No rational response whatsoever.

Attempt 2: about one hour on chat, about 3 work days ago, culminating in tech support acknowledging abnormal behavior and an “escalation” for further review with tracking number. Of course, nothing in the way of a reply so far, and I seriously doubt anything will come of it.
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I am not, and I have used IB's TWS for a very long time. I primarily trade smaller currency positions via IB (sub 5million USD notional at a clip) and have received excellent fills at the most competitive spreads imaginable. Commission is not the cheapest but I prefer quality of execution even if I have to pay for that service. What is your gripe other than saying you dislike it?

NoVoodooHere said:
(& also) is anybody else vexed by the seemingly endless list of bugs/annoyances in TWS?
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First, to those who don't see the problem here, the OP put a limit in inside the current spread and it doesn't show up for the rest of the world to see. Some securities, SPX option spreads are a great example, show a fairly wide bid/ask spread, but you're almost always hit if you bid/offer 5 cents (minimum tick) off the mid...Except if you're seeing this IB behavior and they don't send your order to the market. Then no-one knows you're willing to offer just above/below the mid so they can't and don't fill your order. This is absolutely unacceptable, and its baffling why IB thinks its OK, except that they just don't seem to care.
To the OP, this is standard IB behavior. They claim that they've determined your order isn't marketable (which is utter BS if you're inside the spread, but they do it anyway) so they're "holding" it until it is. It actually gets worse, you can have a futures position on in something illiquid like an out month corn contract and they won't even submit a market order to the market when you enter it because they somehow decided the market isn't trading at a reasonable level. This should be illegal, but somehow that concept of FINRA policing its own just doesn't seem to lead to any action, crazy I know. However it does take just a few minutes to submit a report online with FINRA, so please do. For what its worth, you can sometimes get around this behavior by specifying the exchange instead of using SMART order routing.
 
Sig said:
This is absolutely unacceptable, and its baffling why IB thinks its OK, except that they just don't seem to care
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So why not use another broker? "I hate! hate! hate! SBUX coffee but, ummm, I still go there every morning." I don't get it.
 
I do, although it was painful to leave all the code I wrote for their API behind. To me this is the difference between preference and illegal behavior. IB is illegally ignoring the NBBO law, since by holding a better bid/offer than the spread they're ensuring the published "national best" is in fact not the "national best" bid or offer, which would make the entire securities market break down if everyone did it. SBUX is simply making coffee that you don't prefer, which may seem like a crime at 5 AM when they're the only place open and you really need some caffeine, but generally isn't illegal and not something that would stop someone else from trying a SBUX coffee if they knew in advance.
It also always baffling to me when someone criticizes a poster on an investment board for posting a warning about unexpected/illegal behavior by a broker, telling them they should just switch brokers and stop complaining. That's the whole point of an online community like this one, to share experiences and hopefully steer people clear of something they would have avoided if they knew about it in advance. I would have loved to have read the OPs post or one like it before investing a bunch of time writing code for IBs API, unfortunately I was foolish enough not to discover this board until after I started having issues and did a search to see if I was the only one.
 
Not specific to you. You seem thoughtful, and your point about vendor lock-in (via the API) is interesting. Agree it's an easy trap to fall into, and a worthwhile warning to others. But there are dozens of junk threads on this site of the form "IB sucks because (fill-in-the-blank) but I use them anyway."
 
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