Account holders are encouraged to routinely monitor their order submissions with the objective of optimizing efficiency and minimizing 'wasted' or non-executed orders.  As inefficient orders have the potential to consume a disproportionate amount of system resources. IB measures the effectiveness of client orders through the Order Efficiency Ratio (OER).  This ratio compares aggregate daily order activity relative to that portion of activity which results in an execution and is determined as follows:

OER = (Order Submissions + Order Revisions + Order Cancellations) / (Executed Orders + 1)

Outlined below is a list of considerations which can assist with optimizing (reducing) one's OER:

1. Cancellation of Day Orders - strategies which use 'Day' as the Time in Force setting and are restricted to Regular Trading Hours should not initiate order cancellations after 16:00 ET, but rather rely upon IB processes which automatically act to cancel such orders. While the client initiated cancellation request which serve to increase the OER, IB's cancellation will not.

2. Modification vs. Cancellation - logic which acts to cancel and subsequently replace orders should be substituted with logic which simply modifies the existing orders. This will serve to reduce the process from two order actions to a single order action, thereby improving the OER.

3. Conditional Orders - when utilizing strategies which involve the pricing of one product relative to another, consideration should be given to minimizing unnecessary price and quantity order modifications. As an example, an order modification based upon a price change should only be triggered if the prior price is no longer competitive and the new suggested price is competitive.

4. Meaningful Revisions – logic which serves to modify existing orders without substantially increasing the likelihood of the modified order interacting with the NBBO should be avoided. An example of this would be the modification of a buy order from $30.50 to $30.55 on a stock having a bid-ask of $31.25 - $31.26.

5. RTH Orders – logic which modifies orders set to execute solely during Regular Trading Hours based upon price changes taking place outside those hours should be optimized to only make such modifications during or just prior to the time at which the orders are activated.

6. Order Stacking - Any strategy that incorporates and transmits the stacking of orders on the same side of a particular underlying should minimize transmitting those that are not immediately marketable until the orders which have a greater likelihood of interacting with the NBBO have executed.

7. Use of IB Order Types - as the revision logic embedded within IB-supported order types is not considered an order action for the purposes of the OER, consideration should be given to using IB order types, whenever practical, as opposed to replicating such logic within the client order management logic. Logic which is commonly initiated by clients and whose behavior can be readily replicated by IB order types include: the dynamic management of orders expressed in terms of an options implied volatility (Volatility Orders), orders to set a stop price at a fixed amount relative to the market price (Trailing Stop Orders), and orders designed to automatically maintain a limit price relative to the NBBO (Pegged-to-Market Orders).

The above is not intended to be an exhaustive list of steps for optimizing one's orders but rather those which address the most frequently observed inefficiencies in client order management logic, are relatively simple to implement and which provide the opportunity for substantive and enduring improvements. For further information or questions, please contact the Customer Service Technical Assistance Center.

U.S. residents are unable to trade options on futures for most foreign indicies, such as the DAX. 

1. Total Order Size (TOS) – the total number of shares the trader is willing to purchase (sell) as the price falls (increases);
2. Initial Component Size (ICS) – the number of shares to be purchased (sold) at the Starting Price;
3. Subsequent Component Size (SCS) – the additional number of shares to be purchased (sold) at each Price Increment (at successively lower prices in the case of a purchase and higher in the case of a sale). If a SCS is not entered, the ICS will be used for all component orders.
4. Starting Price (SP) – the price at which you are willing to purchase (sell) the Initial Component Size
5. Price Increment (PI) – in the case of a purchase (sale), this is the decrease (increase) in price at which each successive component order is to be executed.

1. TP = (((ICS/SCS) -1) * PI) + SP
2. BP = SP – (((TOS - ICS)/SCS) * PI

1. TOS = 4,000;
2. ICS = 1,000;
3. SCS = 500;
4. SP = $20.00
5. PI = $0.05

1. Profit taking orders – the Scale Trader may be set to send an offsetting order to take advantage of periodic price surges or if the trader has reached a specified profit objective. This feature may be enabled by checking the box titled “Create profit taking order” and specifying the Profit Offset. Using the example above and a Profit Offset of $1.00, once the ICS was filled at $20.00 and an SCS submitted at $19.95, two profit orders would also be submitted, one for 500 shares at $21.00 and another for 500 shares at $21.05. It should be noted that profit orders are scaled to the SCS regardless of the size of the ICS and that if the ICS > SCS then the profit order price is determined using the PI along with the Profit Offset. 
2. Restore size after taking profit – if using the profit taking orders feature, the trader can enable the repurchase of shares sold at a profit at the price they were originally bought at by checking the box titled “Restore size after taking profit”. This feature remains active whenever the price is within the range of TP + Profit Offset and BP. Using the example above, if order to sell 500 shares at $21.00 was executed this fill quantity would be put back into the original order at $20.00 and the order submitted at $19.95 would be cancelled.
3. Restart Scale Trader & Restart Scale Trader with Filled Component Size – these features allow traders using the profit taking order and restore size features to restart the algorithm if stopped, helping to resume the order starting from the point at which the scaled sequence left off.
4. Auto Price Adjustment – selecting this check box allows for an increase or decrease in the starting price automatically at stated time intervals (e.g., increase $0.01 every hour)
5. Scale Trader Page – provides a view of the real-time status of scale orders, including filled and total quantity, filled, remaining, and total value, and the percent filled for each scale. Accessible via the Page and then Create Scale Trader Page menu options.
6. View Scale Progress - right-click on the scale order line and select View Scale Progress. This will open a window displaying the complete scale price ladder, the Open/Filled component list for the parent scale order, and the Open/Filled component list for the child profit orders.

1. Products – any product offered by IB other than mutual funds (e.g., stocks, options, ETFs, bonds, futures, Forex);
2. Order Type - limit or relative (relative not offered for combination orders)
3. Time in Force – Day, Good-til-Cancel or Day-til-Cancel. May also specify if order is allowed to be filled outside of regular trading hours, if executions may be routed and executed during pre-open session and whether to ignore opening auction.

A special arrangement between CME Group and the Singapore Exchange (SGX), referred to as the Mutual Offset System (MOS), allows traders of both the Yen and USD denominated Nikkei 225 futures to take positions in the products at one exchange and offset them at the other one.  The effect of this arrangement is to create one marketplace crossing different time zones as well as fungibility of contracts between the exchanges.

IBKR account holders may avail themselves of the MOS functionality by specifying at the point of trade entry both the proper underlying symbol and exchange.  In the case of the Yen Denominated Nikkei 225 Index contract the IB underlying symbol is 'NIY' and the exchange either 'CME' (for contracts listed at and trading during CME hours) or 'SGXCME' (for contracts listed at and trading during SGX hours).  In the case of the USD Denominated Nikkei 225 Index contract the IB underlying symbol is 'NKD' and the exchange either 'CME' (for contracts listed at the CME) or 'SGXCME' (for contracts listed at the SGX).

To illustrate the concept of fungibility, were an account holder to enter into a long futures position on the CME exchange and thereafter enter into a short futures position having the same underlying symbol and expiration date but listed on the SGXCME exchange, the effect would be the same as if that short position was executed on the CME exchange and that is to close the long position. 

MOS also provides margin offset for positions entered into on either of the two exchanges in the manner noted above.  Here, for example, a long futures position entered into from the CME exchange would be afforded spread margin treatment against a short position having the same underlying but a different expiration month which was entered into from the the SGXCME exchange. This effect is intended to be similar to that which would take place if both the long and short position were entered into from the same exchange.

IMPORTANT NOTE

IBKR also offers trading in the identical SGX-listed futures contracts but without the MOS features of fungibility and margin offset as outlined above. In the case of the Yen Denominated Nikkei 225 Index, the contract having the underlying symbol 'SGXNK' and exchange of SGX is the functional equivalent of the 'NIY' contract having the exchange of SGXCME.  Similarly, in the case of the USD Denominated Nikkei 225 Index, the contract having the underlying symbol 'N225U' and exchange of SGX is the functional equivalent of the 'NKD' contract having the exchange of SGXCME. It should be noted, however, that a long (short) position of a given expiration entered into on SGX exchange will not close out a short (long) position entered into on the SGXCME, or the CME for that matter.  In addition, there is no margin offset provided between SGX-listed and SGXCME or CME contracts.

A table of trading hours for the MOS eligible products is provided below:

 *Please refer to the respective websites of each exchange for adjustments which take place during periods when US Daylight Savings Time is in effect.