IB TWS

[johngtk]

Hello Millionaires
I'd encountered a sour and bitter experience with IB and their reaction to the matter. Just like to share it with you guys and do not repeat what I'd done on 08 Jun 06.
I cancelled a STC order and transmitted a new STC order on the same underlying stock. After more than 12 minutes, it picked up my cancelled ticket and STO naked for me. See mail below sent to IB. It took days for them to reply despite numberous phone calls and emails resent.
Happy Trading
John Goh


Steve Kelsey <[e-mail]> wrote:
Mary,
I've reviewed the ticket system and it provides a step-by-step account of what occurred on this account. I believe that our US desk has also explained the situation.

At the Freely seminars we constantly remind users to understand and learn the colour codes of the Trader Workstation. It is through these that we communicate to you the status of your order. It is important to realise that hitting "C" on an order is a request to cancel only - you need to wait for the exchange confirmation before you can be sure that the order is cancelled. If you have pending cancels on your screen then you should call us immediately. If you just send in a new order then you run the risk of an overexecution.


Best Regards



Steve Kelsey, CFA, CMT

Director

Interactive Brokers Group / Timber Hill Hong Kong

Tel: [phone]

Fax: [phone]

E-mail: [e-mail]

Web: www.interactivebrokers.com




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-----Original Message-----
From: MARY SOH [mailto:[e-mail]]
Sent: Thursday, June 15, 2006 1:33 PM
To: [e-mail]
Subject: 114631K/cancelled ticket STO

resend #3

Dear Louise/Steve
With reference to Thursday 08 Jun trades attached for your easy reference.
Have spoken to CS in the states but don't get a good verification on the matter.

The problem was that the system picked up my cancelled order STC 3 x OEX @ $8.00.
After I cancelled this STC @$8.00, I changed it to STC @ $10.00 and was filled at 11:24:48
However, my cancelled ticket was picked up to STO @ $8.00 at 11:32:24
Due to margin limitation, the system went on to trigger itself BTC the above @ $12.00 at 11:33:42
The chain of event went on to liquidate by STC my 200 TKO @ $3.08 as well.

My margin will never allow me to STO any OEX in the first place! How did my cancelled ticket was retransmitted to STO on this underlying index?

For your clarification please.

Regards
Mary

[chiu]

I am sorry to hear what has happened.

Personally I had one experience one the OEX trade as well. The order execution was not returned to me for about 7-10 minutes eventhough the traded price has passed thru my order.

So sometime when the trading is hectic, the order filling might take a while to return. We will need to wait till the signal to be sure.

[Conrad Alvin Lim]

Now what are the odds of that happening to two people on the same trade from the same forum? Makes you wonder if it really wasn't a glitch.

[He Shuhan]

Your guys are not alone.

It happened to me in March, where I had a conditional order filled when the stock price was far away from it. In less than 2 seconds, I incurred a $500 slippage cost.

I called IB US helpline though IDD. They picked up after 20 minutes of waiting, and they just insist that it was not their system error and they made me feel like an idiot who cannot differentiate between the colors of green, grey and blue.

After I realized that I can't get anything out of it, they just hung up on me.

Excellent platform for the tolerant traders I would say.

[Conrad Alvin Lim]

From Interactive Brokers:
IB Communiqué - October 25, 2006

Penny-Priced Options Now Available in the U.S.

In the latest step in cascading transaction costs brought on by technology, as of October 24, 2006, Interactive Brokers has cut the minimum price difference for US listed options from a nickel to a penny (i.e. $5 per contract to $1 per contract). Online Brokers and Direct Market Access providers have been under pressure to cut prices for several years. The listed options markets have been relatively immune, but no longer. The SEC mandated a penny pilot program beginning on the 27th of January 2007, in which the six US options exchanges will have to reduce the minimum price change from 5 to 1 cent for options listed on 13 underlying stocks. Interactive Brokers is jumping the gun, and in a first for the US options industry, has made penny pricing on options available as of October 24, 2006.

Interactive Brokers Group ("IBG") has developed a system to allow customers and liquidity providers to display penny prices in the IB system and to try to trade against other participants’ penny prices displayed in the IB system. IB will attempt to match penny-priced bids and offers and send them to an option exchange for execution:

* If you want to post an options price in pennies for other IB users to try to trade against, you can send an order to IB priced in a penny increment (e.g., buy 10 XYZ contracts at $2.07). The order will be treated as a discretionary order, as follows: IB will round the order (down for a bid and up for an offer) to the nearest nickel increment (or dime depending on the premium) and send the nickel-priced order to an options exchange so that it will be working (in this example, IB will send an order to an exchange to buy 10 XYZ at $2.05).

* Then, unless you instruct us to hide your penny price, IB will also display your penny price (with size) on the public IB website and through the IB Trader Workstation (if your price is the best price in our system). Your penny price displayed on the IB website and TWS is an indication of interest to others that you are willing to trade at a more aggressive price (e.g. bidding $2.07) than the nickel-priced order being displayed in the national options market (e.g., bidding $2.05).

* If another participant in the system sends an order that can be matched against your penny price (a contra-side order), IB will attempt to execute a trade at a U.S. options exchange using one of the available penny auction pricing mechanisms (such as the Price Improvement Period auction on the Boston Options Exchange or the Price Improvement Mechanism on the International Securities Exchange).

* During the penny auction process that takes place at the exchange, your order may be executed in whole or in part against the contra-side order at a price no worse for you than the price you specified (i.e., your order to buy 10 contracts at $2.07 will not be executed at a price higher than $2.07 but may be executed at a lower price depending on the contra-side order and depending on what happens during the auction). Of course, you may not trade at all if during the auction process another participant posts a higher-priced bid (e.g., $2.08).

* Auctions typically last for three seconds and after this time we will report an execution back to you (if your order was executed) or if we were unable fully to execute your order we will re-display your penny indication (if your price is the best price in our system).

* As an IB customer, you will also be able to send orders in to try to trade against penny prices displayed by others in the IB system. In that case you may have the opportunity to trade at a better price than the nickel or dime prices displayed in the national options market if someone else on the system has indicated that they are willing to give you a better price.

* To make the system more attractive, professional liquidity providers such as IB’s affiliate Timber Hill (one of the largest U.S. options market makers) and others will be able to post penny indications in the system for you to trade against, and will also have the opportunity to hit penny bids and lift penny offers that you submit.


Available penny-priced options may be viewed on our Penny-Priced Options webpage during US options market hours. To trade penny-priced options log into the Trader Workstation (you must have version 864). For information on entering penny price option orders or viewing available penny-priced options through our scanner, see our Users' Guide.