Overnight Trading Using the Adaptive Algorithm

Interactive Brokers offers trading in overnight hours for over 10,000 US-listed stocks and ETFs. Market data is provided for free, and existing US stock trading permission is sufficient to allow trading. Orders can be placed within Trader Workstation (TWS), Desktop, Client Portal and Mobile. Overnight trading hours are from 8:00pm ET to 3:50am ET with the first session beginning on Sunday at 8:00pm ET and the last session ending at 3:50am ET on Friday. Trades executed between 8:00pm and 12:00am will carry a trade date of the following day. For a full listing of the available stocks and ETFs see the exchange listing page on the website.

It is important to note that orders intended for overnight trading are treated separately from orders submitted during the day, or where submitted orders use the extended trading hours’ time-in-force designation.  In other words, investors should think of overnight orders as an independent venue.  

Submitting an Order

Within the Order Entry panel inside TWS, the investor sets the price, order type, note that only Limit and Adaptive Limit order types are currently supported in Overnight Trading. The investor then clicks on the Time-in-Force dropdown and can select either Overnight or Overnight + Day.

If the investor selects Overnight the order will only be active from 8pm ET to 3:50am ET then will cancel if not filled. If the investor selects Overnight + Day, the order will become immediately active and stay active until either filled or 4pm the next day and utilize IBKR’s SmartRouting throughout the trading session. GTC orders are not supported so if the order is not filled by the end of the regular trading session it will be cancelled.

In this example the investor enters an order, they first select the symbol, then choose the quantity, selects Adaptive Limit and the price and click on buy in the lower left-hand corner. The same steps would be taken for a sell order. The investor then clicks on the Advanced panel and chooses the adaptive order/priority urgency, the investor can choose Urgent, Normal, or Patient.

• The Urgent setting tells the algorithm to scan available prices that would fill the order quickest. This would provide the lowest chance of price improvement and price variance.
• The Normal setting is also the default setting and scans available prices less quickly than “Urgent” and provides a good chance of price improvement and average chance of price variance.
• The Patient setting provides the highest chance of price improvement and price variance by scanning prices slower than Normal.

The Adaptive Algo order type is designed to ensure aggressive limit orders trade between the bid and ask prices. And on average, this order type should lead to better fills.

Once the priority is selected, they close the Advanced panel. They then choose Overnight and Day.  The same workflow can be done for a sell order.

When the investor is ready, they click submit and review the order ticket, when ready they click “Transmit”. In the Activity panel the Time-in-force column will show OVERNIGHT and DAY.

IBKR’s Overnight trading allows the investor to capture more market opportunities and trade over 10,000 US stocks and ETFs 8 pm ET to 3:50 am ET Sunday night through Friday morning.