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IB Stop Order Not Triggered. Is this possible?


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IB Stop Order Not Triggered. Is this possible?

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  #1 (permalink)
 NLD1888 
SINGAPORE
 
Experience: Intermediate
Platform: TS, TOS, MC
Broker: TOS, IB, TS
Trading: Options, Stocks, ETFs
 
Posts: 28 since Jun 2012
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Dear fellow futures.io (formerly BMT) members,

I encountered a problem with my stop loss order (stop market order) today with IB, and was shocked at the explanation given from IB Customer Service (shown below) that the order was not triggered due to NYSE not open at 9.30am EST. Instead, it opened at 09.36.28 EST. From my understanding, stop loss order is kept at the exchange & I don't understand why my order was not executed at the triggered price or a few cents lower than it. Instead, the executed price ($73.5575) is more than a dollar from the triggered price ($74.62).

The executed price was so much lower not because there's a gap down but because the exchange open later than 09.30 EST. The 09.30 EST open price is at $74.64.
The 1-min bar at 09.30am is: (IB don't provide tick data, so 1-min chart is the lowest resolution)
OPEN: $74.64
HIGH: $75.39
LOW: $71.37
CLOSE: $71.37

I was wondering if anyone has encountered similar problem with IB or other broker. Is IB explanation correct? If the exchange doesn't necessarily open exactly at 09.30 EST, then we as traders will be disadvantaged from the loss of those missed time period from 09.30 EST till it's opened.

I checked NYSE (where DO is from) & noted that the exchange support native Stop Order. In that sense, why is my stop order has to wait till the market is opened at 09.36.28 EST. Shouldn't it be executed at the exchange at 09.30 EST even though IB received the data from 09.36.28 EST?

Below is the response from IB.

Stop order will not be triggered until primary exchange opens, which can be anytime after 9:30EST. In your case, NYSE is primary exchange for DO. NYSE did not post an opening print for DO today until 9:36:28EST at 73.55. This is the time your stop order was triggered and executed.

Please remember that there is no price protection with a stop order. Stop order would only be filled at the market after the stop price was triggered. If you are looking for price protection, you may consider using stop limit order etc. Here are all order types we offer and their detailed instructions:
https://individuals.interactivebrokers.com/en/index.php?f=1547

Please feel free to post a response to the ticket if I can be of any further assistance on this matter. If the answer provided addresses the issue, we would appreciate your closing the ticket through the Message Center in Account Management. If you need real-time assistance, please contact us via chat platform or phone by the numbers listed in the following link: https://www.interactivebrokers.com/en/index.php?f=1560

Best Regards,
Sihua
IB Trade Support

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  #3 (permalink)
 monpere 
Bala, PA, USA
 
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I have experienced this with IB. I believe this is the case for Stop/Market orders outside of RTH trading hours. IB will not execute Market orders outside of trading hours because of the potential for large spread slippage. What happens is that your stop order gets triggered, turns into a Market order, but since it is outside of RTH at the time of the trigger, the Market order is not executed, and waits for the Market Open to execute. The same thing will happen if you just send a Market order outside of RTH.

I generally start trading an hour before Market Open. Because of this, I use only Stop/Limit orders with IB, and put the Limit Price 10 ticks away from the Stop price, for the instruments that I trade. This way, if I take any trades outside of the RTH, my stop orders turn into Limit orders far from the current price instead of Market orders, and since IB does execute Limit orders outside of RTH, the resulting Limit order order gets executed immediately, and simulates a Market order.

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  #4 (permalink)
 NLD1888 
SINGAPORE
 
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monpere,

Thanks for sharing your experience.

I understand that Stop Order will not be placed outside RTH, and IB will only forward the order to the exchange during RTH. However, IB Customer Service told me that my stop order was only placed at 09:36:28 EST, which is the time the exchange open yesterday. This is the first time I learnt that NYSE may not open exactly at 09.30 EST. What's your understanding about exchanges which may not open exactly at 09.30 EST.

I have concern because when I read the chart, I saw that the 1-min chart has bar data from 09.30 to 09.36. For the 09.30 bar, my order should have been triggered & executed near my stop price. However, at 09.36.28, the price has gone way below my stop price. IB keep telling me that my stop order cannot be placed until NYSE open at 09.36.28 EST. That's what I'm trying to figure out.

Rgds,
Dan

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  #5 (permalink)
 monpere 
Bala, PA, USA
 
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NLD1888 View Post
monpere,

Thanks for sharing your experience.

I understand that Stop Order will not be placed outside RTH, and IB will only forward the order to the exchange during RTH. However, IB Customer Service told me that my stop order was only placed at 09:36:28 EST, which is the time the exchange open yesterday. This is the first time I learnt that NYSE may not open exactly at 09.30 EST. What's your understanding about exchanges which may not open exactly at 09.30 EST.

I have concern because when I read the chart, I saw that the 1-min chart has bar data from 09.30 to 09.36. For the 09.30 bar, my order should have been triggered & executed near my stop price. However, at 09.36.28, the price has gone way below my stop price. IB keep telling me that my stop order cannot be placed until NYSE open at 09.36.28 EST. That's what I'm trying to figure out.

Rgds,
Dan

I think it is possible that an exchange might delay the official open for any number of reasons. This does not mean that their is no trading before the official open. Even though the market may not have officially opened until 9:36am, there was still pre-market trading going on before 9:30am, so if your charts were open at 9:30am then they would receive data even though the market was not open yet. So, if the market opened at 9:36, yes your charts would show data at 9:30am, but your trade would be delayed until 9:36am.

The moral of the story is, if you are using IB, don't use Stop/Market orders outside of RTH.

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  #6 (permalink)
 NLD1888 
SINGAPORE
 
Experience: Intermediate
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monpere,

Thanks for the clarification.

By the way, I recently signed up with TradeStation & when I checked the 9.30am - 9.31am (1-Min bar), I noticed it has different OHLC data compared to IB.

I do not know how to attach the charts from both IB/TS, so I've quote the OHLC for your reference.

1-min bar from 09.30am to 09.31am EST
IB TS
OPEN: $74.64 $72.70
HIGH: $75.39 $74.64
LOW: $71.37 $71.37
CLOSE: $71.37 $71.37

When I check the daily chart of both platforms, I noticed the difference is only on the OPENING price.
So, can the opening time & price be different depending on which broker one uses?
This is really something new to me. I am still puzzled that the opening time can be different from 09.30 EST under normal condition, and there can be different opening price depending on which broker one uses.

Anyway, I guess I have to live with it if this is inherent in the system.
However, I hope this thread will serve to highlight this to other futures.io (formerly BMT) members for better understanding.

Rgds,
NLD

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 imPairsonator 
Thessaloniki, Greece
 
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"opening print" != "the exchange opening"

Of course the exchange opened at the right time. The stop is triggered on a trade, not by the bid/ask.

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 NLD1888 
SINGAPORE
 
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imPairsonator,

Pardon me for my lack of knowledge in this issue.

What you are saying is that the exchange still open at 09.30 but IB platform can only start to send the order to the exchange at opening print (which is 09.36am as what was explained by IB Customer Service). Is this opening print the same for all other brokers? Aren't retail traders like us being disadvantaged since the trade put up for RTH should have been triggered with a better price?

Rgds,
Dan

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