IB Communiqués - March 7, 2008
We now offer the following new products and asset classes:
- Mexican stocks, futures, and options
- Spanish stocks
- US Treasury Bonds and Notes (Bills will be introduced shortly)
- Vanguard No-load Mutual Funds (we will continue to add additional no-load fund families over time)*
One of the major benefits of being an IB customer is that when new products
and asset classes are added, as they often are, they are integrated seamlessly
into our platform, to make the trading of new products easy for our customers.
To start trading any of these products, visit Trading Configuration within
Management to upgrade your trading permissions and add market data
subscriptions. Please note that adding trading permissions for new asset classes
(i.e. stocks, mutual funds, etc.) requires overnight approval.
Additional information about these products can be found on our Commissions, Exchanges and Margin Requirements web pages.
In our last communication, we announced the launch of the IB Risk Navigator, a real-time market risk management platform that unifies exposure across multiple asset classes around the globe. We'd like to encourage everyone to learn more about this powerful tool, and invite you to attend our IB Risk Navigator webinar on Wednesday March 26, 2008 at 12:00pm ET. You can sign up for this class on our Webinars Registration page. If you can't attend the webinar, you can view our February IB Risk Navigator session on our Previously Recorded Webinars page.
the last month, we made the following upgrades to the IB Risk Navigator:
- Aggregation on leveraged ETFs for VAR and the P&L Graph. This enhancement reflects the price relationship between a leveraged ETF and its “underlying” index more accurately.
- Aggregated Delta, Gamma, and Vega values in the top “totals” row of all relevant reports.*
- A new drill-through capability on the Measure by Price Change and Volatility Change report lets you view the implications of any risk scenario in the context of the other risk reports.
For more information on the IB Risk Navigator, see the TWS Users' Guide.
We continue to enhance our Trader Workstation offerings, and have recently added the following:
- An interactive Search field has been added to the main trading window. Search on any concept or feature, and receive a results list sorted by category. Select the item you want to see, and TWS immediately opens the appropriate window, toolbar or feature and focuses in on the specific search item you entered. Search on a contract, and results from the contract database are included. In addition, a new Contract Search feature under the Ticker menu displays all contracts for your entry.*
- Basket files are now saved in a user-friendly format that is easier to edit, and opens in Excel. The basket files created in the old format can still be used. For information on creating basket orders in TWS, see the TWS Users' Guide.*
- The Order Wizard makes it easy to identify, create, modify and transmit the most effective order by displaying all order types and their attributes within a single pane.
- The Options Analytics window now separately displays the Greeks for puts, to reflect potentially divergent values for European vs. American-style exercise scenarios.
- New sleeker look for TWS, with the ability to select a new color palette on login.*
For more details on all TWS upgrades, see our Release Notes page.
Voice-brokered options quotes and executions are now available for large-size orders. Using our network of liquidity providers may also provide tighter markets and/or more liquidity than the electronic markets alone. For order sizes of 100 contracts or greater, our option trading desk can provide verbal quotes prior to exposing your outright or spread orders to the market. Pit -traded products such as SPX, OEX, and NDX are also supported, as well as futures options such as ES and ER2.
As our customers know, IB's Trader Workstation is a comprehensive and versatile
platform that lets you trade multiple products on numerous exchanges
around the world from a single screen, supports more than 40
different order types, provides best execution SmartRoutingSM, complete customization, alternative order entry modules, real-time global risk
analysis and much, much more. With so much to offer and enhancements
being added monthly, it's no wonder that some features may be
overlooked or forgotten along the way.
Beginning with this edition of the IB Communiqué we will include The Traders' Edge, re-introducing you to existing TWS features that we believe offer unique advantages to IB customers.
relative order provides a means for traders to seek a more aggressive price than
the National Best Bid and Offer (NBBO). By becoming liquidity providers, and
placing bids or offers into the book that are more aggressive than what is currently
quoted, traders increase their odds of execution. Quotes are automatically adjusted
when other market participants become more aggressive. For a buy order, your
bid is pegged to the NBB by a more aggressive offset, and if the NBB moves up,
your bid will also move up. For sales, your offer is pegged to the NBO by a more
aggressive offset, and if the NBO moves down, your offer will also move down.
In addition to the offset, you can define an absolute cap, which works like a
limit price, and will prevent your order from being executed above or below a
Let's take an example:
For a buy, the bid would go into the book at $20.02, which is more aggressive than the NBB of $20.00, and will move the NBB to $20.02. This is better than the $20.05 you would pay as a liquidity taker. Your $20.02 bid is now at the market and will wait for a sell order, but if others better your bid and the market moves to $20.03-$20.08, your bid would adjust to $20.05. If the market moves up to $20.06-20.11, your bid is capped at $20.07. Under normal market conditions, your order will execute before any down moves in the NBB.
For a sell, an offer would go into the book at $20.03 which is more aggressive than the NBO of $20.05, and better than the $20.00 you would receive as a liquidity taker. Your $20.03 offer is now at the market and will wait for a buy order, but if others better your offer and the market moves to $19.97-$20.02, your offer would adjust to $20.00. If the market moves down to $19.94-19.99, your offer is capped at $19.98. Under normal market conditions, your order will execute before any up moves in the NBO.
For more detailed information on how to enter Relative Orders into the Trader Workstation, see our Users' Guide.
The ScaleTrader tool
helps to ensure that larger sized trades are not subject to increasingly
deteriorating prices. Consider the alternatives. You could submit
a basic block order, and watch as acceptable prices at the start
of execution rapidly give way to deteriorating prices as the market
moves. Or, you could split up your order manually, and submit multiple,
smaller orders at various price levels to minimize your footprint,
but this requires time, effort and constant
monitoring. ScaleTrader uses price and size determinants that you specify to automatically scale your
large volume order into smaller, incrementally-priced components, and submits
them as limit orders.
In addition, you can set a “scale offset” amount that ScaleTrader uses to submit opposite-side profit taking orders against your original order components. This allows position traders to pre-define the minimum amount of profitability acceptable for exiting a position. You can track the progress of the trade from the View Scale Progress window, accessible from the right-click menu on a scale order line.
If prices move and a component of the order becomes unmarketable, the entire order waits until the component price becomes marketable. You cannot modify a component of the order. You may use the good ‘til cancelled time in force to allow the order to continue working through an unmarketable component.
take an example:
|NBBO:||$63.08 - $63.10|
|Total Order Size:||20,000 Shares|
|Scale Component Size:||2,000|
For a buy, the first component of 2,000 shares is submitted as a limit at $63.10, which is your starting price. After this level executes, the next limit order is submitted at $63.09, and so on. The order progress depends on the linear execution of each scaled component.
If instead of a buy example you are selling, the first 2,000 shares are submitted as a sell limit at $63.10, which is your starting price. After this level executes, the next level order is submitted at $63.11, and so on.
The opposite-side Scale Offset orders are submitted when the parent component executes. In the buy example, as soon as the first component executes at $63.10, a sell limit is submitted for $78.10 (the buy price plus the $15.00 offset) is submitted. The profit-taking orders are submitted with respect to the execution of the original parent orders.
For information on creating scale orders in TWS, see the Users' Guide.
*These features are currently in beta, and will be released shortly with the 883 production build.