A paper trading account is a simulated account trading in a simulated market. IBKR programmatically simulates, to the best possible abilities, actual market conditions. However, it is not a real market, and in some instances prices may not exactly match. IBKR is simulating not only the trader’s functionality and the market, but also the role of the exchange. In a real, live account, the order would be sent to the exchange, and the exchange would be doing the execution—not IBKR.
Although the paper trading account simulates most aspects of a production TWS account, you may encounter some differences due to its construction as a simulator with no execution or clearing abilities.
These differences include but are not limited to:
- No support for some order types including: Passive Relative, Auction, RFQ, Pegged to Market and Market with Protection (for futures directed to CME).
- Fills are simulated from the top of the book; no deep book access.
- Limited combo trading.
- Stops and other complex order types are always simulated in paper trading; this may result in slightly different behavior from a TWS production account.
- Penny trading for US Options is not supported. You will be able to submit the order but it will not receive a penny fill.
- The trade simulator will reject the remainder of any exchange-directed market order that partially executes. This may or may not match the behavior of a real-world exchange. Market orders received while there is no quote on the opposite side will be held until the market data arrives (i.e. until the first partial fill).
- Mutual Fund trading is not supported.
Additional Information