Help IB's TWS

[tonie]

Please can someone help me regarding Limit Orders.

If for example a stock is trading at Bid $40.00 Ask $40.05 & my signal to SHORT the stock is $39.85 do i select a sell short LIMIT ORDER or do i select a sell short STOP LIMIT ORDER so when the price hopefully drops to $39.85 i might get filled. BY selecting the STOP LIMIT ORDER it aks me for 2 prices. A Lmt.Price & an Aux.Price....this is so confusing to me!!! , at present i'm using market orders & when trying to short NAZ stocks i get really poor prices so to address this i understand that LIMIT ORDERS are answer but i don't understand tham at all...Please can someone help???????

cheers

tonie

 

[frugi]

In general

A STOP order is used to SELL below current market price or BUY above it. You are not guaranteed to be filled at your chosen price.

A LIMIT order is used to BUY below current market price or SELL above it. You will always be filled only at your chosen price or better (as long as the stock trades there of course!)

A STOP LIMIT order is a combination of the two. It behaves first as a STOP order. When the STOP price is triggered it becomes a LIMIT.

e.g You are long Peedee at 12. You place a STOP LIMIT to sell at 10 and 9.5 where 9.5 is the limit price and 10 the auxiliary price. If Peedee reaches 10 the STOP will trigger, meaning you will sell at the best price available between 9.5 and 10.. The advantage is you will not get a bad fill (i.e. worse than 9.5) UNLESS the market falls right through 9.5 without a trade having taken place, in which case you will not get filled at all (this is the disadvantage!).

http://www.interactivebrokers.com/h...aking_Trades/Create_Order_Types/stopLimit.htm

http://www.interactivebrokers.com/index.html?html/tradingInfo/orderInformation.html~top.body

Or try a search of this site for "stop and limit" or even "interactive brokers" - there's a few pages but some more in depth info about using orders with IB if u dig.