Accumulate/Distribute – Basic

The Accumulate/Distribute algorithm can help the investor to discreetly enter large volume orders and execute trades over time with minimal market impact and lesser risk of detection by market participants. It is best used for large-sized orders greater than one million dollars or very low liquidity stocks. Investors can use Accumulate/Distribute to trade stocks, options, futures, and forex products.

The investor would like to buy 10,000 shares of AMETEK, INC. but does not want to potentially impact the market, so they will use the Interactive Brokers Accumulate/ Distribute algorithm to send the order in increments of 200 shares every thirty seconds. If each incremental order is filled immediately, then the total order would be filled in 25 minutes.

The investor enters the symbol AME and, choosing to Buy, enters 10,000 in the volume and 200 in the increments drop-down box and selects thirty-seconds. If the investor wanted to sell AME, they would follow the same steps but choose Sell instead of Buy.

Next, the investor chooses the order type. In this case the investor is using a market order, aiming for an immediate fill and changes the time in force to Day. They are now ready to send the order by clicking transmit.

It is important to note that the Trader Workstation must be running so that Accumulate/Distribute  can send orders.

There are additional features to the Accumulate/Distribute that allow the investor to regulate the order to be in and out at certain price levels as well as setting various triggers that determine whether the order is active or inactive. Please see the additional videos and user guide for further information.