- Solve real problems with our hands-on interface
- Progress from basic puts and calls to advanced strategies
Interactive Options Course
Lesson 5 of 16
The IBKR Trailing Limit if Touched order type is like the Trailing Stop Limit order except that while both order types can be used for opening and closing, investors typically use the Trailing Stop Limit to close a position while using the Trailing Limit if Touched to open a position. The Trailing Limit if Touched serves as an entry strategy to establish new positions at favorable prices by creating a dynamic entry point that adjusts as the market moves away from your desired entry direction but will remain fixed once the market reverses direction and allows the investor control over the execution price by setting a limit.
In Desktop the investor creates an order ticket then they then click on “Advanced” in the lower right-hand corner to bring up the Advanced Order Ticket window. Once the Advanced Order Ticket window is up, the investor selects the quantity and selects Trailing Limit-if-Touched in the order type drop-down In the Description section.
The investor then enters the limit price, or the limit offset price, if the investor sets the limit price, the limit offset is calculated by the difference between the limit price and the stop price. For sell orders the investor will sell at the limit price or higher and for buy orders they will pay the limit price or lower.
Next the investor enters the trigger price which will be used for the initial trigger price but will adjust based on the trailing amount and the movement of the underlying. They then enter the trailing amount in terms of dollars or percentage. Finally, they set the time-in-force to DAY or GTC,
To fully understand how the Trailing Limit if Touched orders works let’s review the following example for stock ABC currently trading at $150:
An investor sets up the Buy Trailing Limit if Touched for 100 shares with an initial trigger price of $146.50, a $3.00 trailing amount, and a 15 cents limit offset
| Market Price | Trigger Price | Limit Price (if triggered) | Status/Action |
| $150.00 | $146.50 | N/A | Order placed with manually set trigger price of $146.50 (instead of calculated $147.00) |
| $148.50 | $145.50 | N/A | Market drops below $149.50; trigger price begins adjusting to maintain $3.00 trail |
| $146.25 | $143.25 | N/A | Market continues dropping; trigger price follows |
| $144.00 | $141.00 | N/A | Next day, market drops further; trigger price adjusts down |
| $142.50 | $139.50 | N/A | Market continues dropping; trigger price follows |
| $140.00 | $137.00 | N/A | Market drops more; trigger price adjusts to $137.00 |
| $140.75 | $137.00 | N/A | Market rises slightly; trigger price remains fixed |
| $136.80 | $133.80 | N/A | Market drops again; trigger price adjusts downward |
| $134.50 | $131.50 | N/A | Next day, market opens lower; trigger adjusts |
| $133.00 | $130.00 | N/A | Market continues lower; trigger follows |
| $130.50 | $127.50 | N/A | Further market decline; trigger adjusts |
| $128.75 | $125.75 | N/A | Market approaches support level; trigger follows |
| $129.50 | $125.75 | N/A | Market begins to reverse; trigger price remains fixed |
| $127.00 | $125.75 | N/A | Next day, market dips then starts rising |
| $126.00 | $125.75 | N/A | Market continues testing support |
| $126.50 | $125.75 | N/A | Market begins rising but hasn’t hit trigger yet |
| $126.00 | $125.75 | N/A | Market fluctuates near support |
| $125.90 | $125.75 | N/A | Market approaches trigger price |
| $126.25 | $125.75 | $125.90 | ORDER TRIGGERED: Market rises above trigger price; converts to limit order with price of $125.90 (trigger price + $0.15 offset) |
| $126.25 | N/A | $125.90 | Limit order active, waiting for execution at or below $125.90 |
| $125.85 | N/A | $125.90 | Market dips slightly |
| $125.85 | N/A | N/A | ORDER FILLED: 100 shares purchased at $125.85 |
The investor purchases ABC for $125.85 or $24.15 lower than when it was placed.
When ready the investor can either preview the order or click submit. Details of the order can be seen by clicking on the Orders tab in the Portfolio screen.
The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Interactive Brokers, its affiliates, or its employees.
Join The Conversation
For specific platform feedback and suggestions, please submit it directly to our team using these instructions.
If you have an account-specific question or concern, please reach out to Client Services.
We encourage you to look through our FAQs before posting. Your question may already be covered!