IBKR Desktop Stop Limit Orders

Investors typically use Stop Limit orders to close out of an existing position. They are intended to either lock in profits or limit losses.

Alternatively, a Stop Limit order can be created to force the investor into a fresh position when a specified price is reached. In this case, the investor has determined that they either want to go long if prices rise above a specific price or establish a new short position should prices fall below a specified threshold.

The stop price serves as a trigger, which will activate the order when penetrated. A Stop Limit order has the additional component of a limit price associated with the stop price trigger.

While this added element eliminates the price risk associated with the Stop order, it introduces the risk that the order may not fill at all, and that the investor may ‘miss the market altogether even if it is triggered.

Creating a Stop Limit order in IBKR Desktop

The order panel in IBKR Desktop can be populated by either clicking on a symbol in the Portfolio or Watchlist screens or typing in a symbol in the search bar. Once the symbol is selected the investor can click “Buy” or “Sell” to create an order window. In this example the investor chooses to create a “Sell” Stop order to close out an existing position in AT&T if the stock goes below a certain price. The investor right clicks on “T” in the portfolio and selects close position to populate the order ticket with the position and have it set to “sell”. Directly below are three order types; Limit, Market, and Stop. The investor clicks on Stop and then scrolls in the drop-down and selects “Stop Limit”. They can adjust the limit and stop prices in the lines below. The Stop price is the price at which the order will be triggered. The order will not be filled worse than the limit price.

Next the investor selects the Time-in-force by clicking on the box. They can select Day or Good ‘Till Cancelled, known as GTC. In this scenario the investor would like to keep the stop order active past the current trading session, so they select GTC. For more information on these terms please see the IBKR Traders’ Glossary.

Submitting a Stop Limit order in IBKR Desktop

When the investor is satisfied with the order inputs, they can either click on “Preview” to see a breakdown of the order as well as its effect on margin, “Save” to save the order to be transmitted later, or “Transmit” to send the order. The investor chooses “Submit Sell Order” and the Order Confirmation screen appears. Once satisfied they click “Transmit” to send the order. Once sent if not filled, the investor can view trades, modify the order, cancel order from the Order Confirmation screen.

A Stop Limit order is an instruction to submit a buy or sell limit order if and when the user-specified stop trigger price is attained or penetrated. A Stop Limit order is not guaranteed to fill or be triggered.