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Introduction

  • Definition: Conditional orders allow traders to specify one or more conditions that must be met before an order is submitted.

  • Usage: These orders can be used to buy or sell options, stocks, futures, and other instruments based on conditions like price, volume, or time.

  • Example: An investor might set a conditional order to buy 10 call options on MSFT only if its share price is ≤ $46.45 and the S&P 500 index is ≤ 2,000.

  • Platforms: Conditional orders can be created in both TWS Classic and Mosaic, and can be used outside of regular trading hours.

  • Steps: To place a conditional order, create a limit buy order, add conditions, and transmit the order. The order will be executed when the conditions are met.

Definition and Usage [1]

  • Definition: Conditional orders allow traders to specify one or more conditions that must be met before an order is submitted.

  • Usage: These orders can be used to buy or sell options, stocks, futures, and other instruments based on conditions like price, volume, or time.

  • Safeguard: Conditional orders help safeguard investors from trading outside of their preferred circumstances.

  • Complexity: Multiple stipulations can be combined, making it harder for the trade to execute but ensuring it meets all conditions.

  • Variables: Traders can use logical conditions from Price, Time, and Volume variables using operators like equal to, greater than, or less than.

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Platforms and Availability [2]

  • Platforms: Conditional orders can be created in both TWS Classic and Mosaic.

  • Availability: These orders are available for US and certain Non-US products on the Pro platform.

  • Outside Hours: Conditional orders can be used outside of regular trading hours.

  • Order Types: They can be used for various order types including limit and stop orders.

  • Routing: Orders can be routed through Smart or Directed routing options.

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Steps to Place a Conditional Order [1]

  • Step 1: Create a Limit Buy Order. For example, enter a limit buy order for 1 contract.

  • Step 2: Add Condition to the Order. On the Conditional tab, add a new condition by clicking the Add button.

  • Step 3: Specify Condition. Choose the condition type (e.g., Price), enter the underlying symbol, trigger method, operator, and trigger price.

  • Step 4: Transmit the Order. Click Transmit to submit the order.

  • Step 5: Condition Satisfied. When the condition is met, the order will be executed.

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Examples of Conditional Orders [2]

  • Example 1: Buy 10 call options on MSFT with a specified limit price of 85-cents, but only when its share price ≤ $46.45 and Volume >25mm and the S&P 500 index was ≤ 2,000.

  • Example 2: Buy 100 shares of AAPL at the market if SPY drops 3%.

  • Example 3: Cancel a limit order to buy 100 shares in AAPL if SPY is higher on the day by more than 2%.

  • Example 4: Buy 500 shares of AAPL at the market if the rebate rate in Meta (FB) becomes greater than or equal to 5%, or the margin cushion is 25% or lower.

  • Example 5: Buy 1 XYZ option contract if the price of the underlying stock falls to 464.00 per share.

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Advanced Tips and Considerations [2]

  • Multiple Conditions: You can combine multiple conditions using logical operators like 'and' or 'or'.

  • Outside Hours: Allow conditions to be satisfied and activate outside of regular trading hours.

  • Cancel Orders: Conditional orders can also be used to cancel prevailing orders based on specified conditions.

  • GTC Orders: For Good-til-Canceled (GTC) conditional orders, the condition has to be retriggered again on the following day(s) if not executed on the same day.

  • Advanced Variables: Conditions can include Price, Margin Cushion, Volume, Percentage Change, Rebate Rate, Time, Daily P&L, Trade, and Shortable Shares.

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Related Videos

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<div class="-md-ext-youtube-widget"> { "title": "How to use a Conditional Order in TWS", "link": "https://www.youtube.com/watch?v=IWk4FRrzHJI", "channel": { "name": ""}, "published_date": "Apr 18, 2020", "length": "" }</div>

<div class="-md-ext-youtube-widget"> { "title": "Interactive Brokers TWS Platform: How to place conditional ...", "link": "https://www.youtube.com/watch?v=s8EQ-JVC0TQ", "channel": { "name": ""}, "published_date": "Feb 23, 2023", "length": "" }</div>

<div class="-md-ext-youtube-widget"> { "title": "IBKR Options purchase using conditional order", "link": "https://www.youtube.com/watch?v=XEcruNL8CKA", "channel": { "name": ""}, "published_date": "Jan 9, 2022", "length": "" }</div>