IB Communiqué - April 25, 2008
IB is pleased to announce the integration of Thomson Reuters Worldwide Fundamentals into the Trader Workstation. This comprehensive real-time financial information, comprising over 1,000 variables for data such as price earnings ratios, financial statements and analyst predictions, can be viewed report-style through an integrated TWS window, and can also be accessed through our socket APIs. View fundamentals for over 43,000 companies on 100 exchanges around the globe, with approximately 14,000 companies in North/South America, 12,000 in Europe and the Middle East, and 17,000 in the Asia-Pacific regions. In addition, you can add Fundamental data fields directly to any trading page, and apply the new Fundamental parameters to Market Scanner queries. Pricing is USD 5.00 per month (or non-USD equivalent) for non-professionals, and USD 40.00 per month (or non-USD equivalent) for professionals, as of May 1, 2008. Once subscribed to Reuters Worldwide Fundamentals for any given month, you will be charged the full monthly fee. To subscribe, log in to Account Management and use the Market Data Subscriptions page located under the Trading Access menu. Customers may test the new Fundamentals market data for free through April 30, 2008.
For more details on using Thomson Reuters Worldwide Fundamentals in TWS, see the TWS Users’Guide.
Our third annual IB Collegiate Trading Olympiad came to a close on Friday, February 29th. This yearly competition is open to college students worldwide, and brings attention to the many technologically-focused career opportunities available in the financial services industry. We received applications from over 370 participants representing 32 countries, and the top winners were awarded cash prizes totaling $359,000. View the list of this year's winners on the IB Trading Olympiad web page.
Please note the following commission changes:
Canadian options - We recently reduced our commissions for Canadian Options from CAD 2.00 to CAD 1.50
All products - Effective May 1, 2008, upgrades to the order tracking methodology (to be more consistent with exchange systems) will affect the mechanism for tracking order modifications. Specifically, modified orders will be treated as the cancellation and replacement of an existing order with a new order. On certain exchanges, this may have the effect of subjecting modified orders to commission minimums as if they were new orders. For example, if an order for 200 shares is submitted and 100 shares execute, then you modify the order and another 100 shares execute, a commission minimum would be applied to both 100 share orders. For detailed commissions information on all products, visit the Commissions page.
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. TWS supports over 40 different order types, provides best execution SmartRoutingSM, alternative order entry modules, real-time global risk analysis, and much, much more. With all of this to offer and enhancements being added monthly, it's no wonder that some of our features get overlooked along the way. Last quarter, the Traders’Edge re-introduced you to our relative and scale orders. In this edition we focus on the TWS BasketTrader order tool, and our Pegged-to-Stock order type for options.
Designed to offer professional traders and investors a streamlined process for simultaneously submitting a large group of individual orders as a package, TWS BasketTrader lets you create, transmit and manage baskets all from a single, user-friendly screen. Our unique interface gives you more flexibility than the traditional market-order, stock-basket, trading tools offered by other brokers. BasketTrader makes it easy to create and trade baskets composed of multiple order types on a variety of different products.
Loading a basket order is as easy as selecting the custom-designed file from the Basket File list at the top of the BasketTrader. Or, use the Index panel to create a traditional index-based basket of stocks. Begin by selecting an index from a comprehensive drop down list. Next, customize the composition of the basket by filtering out components based on weight, market cap, beta, price, or symbol. Finally, specify any preferred exchanges and define the order parameters.
The Orders panel shows you real-time summary information about the basket, including the number of orders, total shares, and the estimated total value of the orders in your basket. Use the buttons along the bottom of the panel to make global changes to all orders, or modify parameters for specific orders directly in the order line.
The Execute panel lets you set allocation criteria to control the quantity submitted. Specify a percentage, which will be applied to each order quantity, or define a USD amount that is divided by the number of orders and allocated equally amongst all orders.
The Summary panel shows you statistics across all areas of the order, including overall totals, filled totals and percent of the basket for orders, shares and currency. It also includes tabs with data taken directly from the Trades and Account window.
For more details on the TWS BasketTrader and how to create and manage basket orders, see the TWS Users’Guide.
The Pegged to Stock, or Relative to Stock order provides a means for traders to ensure that their option price is continuously updated to reflect changes in the price of the underlying stock. Using the stock price change and a user-defined delta, TWS automatically recalculates the options price each time the stock price changes.
The option price is updated using the calculation below:
(signed)Delta x Underlying Price Change
where the Underlying Price Change is calculated as:
Current Stock NBBO Midpoint - Original Stock NBBO Midpoint(or stock ref price)
Note that the delta field requires a user-defined value, and is always signed positive for call options, and negative for puts. The examples below show Buy and Sell pegged-to-stock orders for both calls and puts, and include scenarios in response to both a rising underlying price and a falling underlying price.
Examples use the Market Data Assumptions in the table below. The TWS Inputs list includes values entered in TWS by the user as well as default values.
Market Data Assumptions
TWS Inputs (editable fields)
|Stock NBBO||$99.00 - $101.00||Default option starting price||$4.00|
|Stock Midpoint||$100.00||Stock Reference Price||$100.00|
|Option NBBO||$3.90 –4.10||Delta||50%|
|Option Midpoint||$4.00||Order Type||PEG STK|
If the underlying price rises...
For a Buy/Sell Call: Bid is entered at the midpoint of the option NBBO, or $4.00. The underlying price moves up and the stock NBBO midpoint goes to $100.50. Your bid is adjusted to $4.25, which is the positive signed delta x change in price, or +50% x $.50.
For a Buy/Sell Put: Bid is entered at the midpoint of the option NBBO, or $4.00. The underlying price moves up and the stock NBBO midpoint goes to $100.50. Your bid is adjusted to $3.75, which is the negative signed delta x change in price, or -50% x $.50.
If the underlying price falls...
For a Buy/Sell Call: Bid is entered at the midpoint of the option NBBO, or $4.00. The underlying price moves down and the stock NBBO midpoint goes to $99.50. Your bid is adjusted to $3.75, which is the positive signed delta x change in price, or +50% x -$.50.gst all orders.
For a Buy/Sell Put: Bid is entered at the midpoint of the option NBBO, or $4.00. The underlying price moves down and the stock NBBO midpoint goes to $99.50. Your bid is adjusted to $4.25, which is the negative signed delta x change in price, or -50% x -$.50
For details on how to enter Pegged to Stock orders in TWS, see the TWS Users’Guide.