IBKR Toolbox:  Using the Exit Strategy Tool in TWS

The Interactive Brokers Exit Strategy tool allows the investor to set up a stop loss, profit taker, or both, also known as a bracket order, to exit a current position. This can be extremely helpful if the investor has an existing position and wants to set up an exit strategy that can limit loss and or protect profit with orders that are ready to go and be submitted when the price of the instrument hits a certain level.

The Exit Strategy tool can be accessed by clicking on a symbol in the portfolio page, scrolling down to Trade and selecting, “Create Target/Stop Exit Bracket”.

In this example the investor has a long position of 900 shares of AT&T (Symbol: T) that they purchased for an average price of $27.491 and would like to set up a bracket order to close out of the position to either lock in a profit of $1,358.22 for a 5.49% return at $29.00 or limit their loss to $1,341.78 or -5.42% if T declines to $26.00.

The bracket order types are adjustable by selecting the drop-down box and choosing from Limit, Relative, or Retail Price Improvement for the Profit Taker and Stop, Stop Limit, Trailing, or Trailing Limit for the Stop Loss. For more on order types please see the Order Types page on our website under trading.  Prices are adjustable either by clicking on the prices in the table or dragging the lines in the chart. The investor can also select the Time-in-Force, Good ‘Til Cancelled is the default setting and will allow the orders to stay active past the trading day if not filled. The table also shows the current bid and ask as well as the unrealized and Daily P&L.

The time frame shown on the chart is adjustable by dragging the line below to increase or decrease the time-period shown. The blue bubble after the current day shows the standard deviation of the underlying and can be adjusted to show a standard deviation of 1, 2, or 3 by clicking on the chart, selecting Chart Parameters and adjusting the Estimated Price Range.

Once the investor is ready to create the orders they can click on “Preview Orders” to see the Order Confirmation window and review the order details. Once ready they click transmit to enable the bracket orders.

The Exit Strategy tool available on the TWS, Client Portal, and Mobile app allows the investor to create orders to close out an existing position while either locking in a profit or limiting loss without having to constantly monitor the underlying instruments price.