stop order in IB

Discussion in 'Online Brokers' started by Elli, Dec 26, 2017.

  1. Elli

    Elli Active Member

    I want to place Dan's latest trade, a GTC 31JAN stop order when the price of the call option, strike 2755, is above 4.7 in my IB account. Do I do this as a stop order or do I need to do a conditional order?
  2. DGH

    DGH Administrator

    Hi Elli. I will refer this to Tom with an email to make sure he sees it. Even though I have a small IB account, I never place a STOP order in it. So, I don't know the answer.
  3. ACS

    ACS Well-Known Member

    Be careful about using stop orders in any option that trades infrequently and/or has a wide bid/ask spread.
  4. DGH

    DGH Administrator

    Hi ACS. Yes, this is always a risk, since the fill will not be a good one. However, I want to be out of a short call when the Mark to Sale ratio is 1.60, so I am willing to take the less than desirable fill. I calculate these combo spreads such that, if I am stopped out on the short call, I will sell the long call and, if the premium received for the put credit spread is included, I should have a near break even or, possibly, a small profit. If neither the put credit spread or call credit spread is hit, then I make a nice profit. In the meantime, the RTT is working for me.
  5. AKJ

    AKJ Well-Known Member

    Hi Elli,

    I am not sure exactly what dan or tom are trying to accomplish, but as a matter of general advice, I would second ACS and suggest avoiding stop orders on options unless absolutely necessary. If you want to get out of an option position when the price adversely moves against you a certain amount, I would suggest setting up an alert to notify you when the underlying reaches a certain level, then go in and work an order to exit the position responsibly and minimize slippage.
    Ice101781 likes this.

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