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Duration: 3:04

Level: Beginner

A Snap to Midpoint order is available for U.S Stocks, Options, and Futures on the Pro platform. Accessible through both Mosaic and Classic TWS.

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Study Notes:

In this video we will walk through how to enter a Snap to Midpoint order.  The Snap to Midpoint order works with US stocks, options, and futures. The original order price is determined by the current bid/ask price plus or minus the offset. A sell order price is calculated by adding the offset to the bid/ask price and a buy order price is calculated by subtracting the offset from the bid/ask price. While this is similar to a pegged order it doesn’t continue to peg as the price moves.

The Snap to Midpoint order type can be useful on stocks where the bid/ask spread is wide. Instead of just entering a market order you can submit the trade using the Snap to Midpoint order type and potentially get a better fill somewhere in between the spread, using the offset amount to determine precisely how aggressive you want the order to be without hitting bid or ask prices. Adjust the offset amount to determine just how aggressive you want the order to be.

We will now enter a Snap to Midpoint order in the Mosaic Order Entry Panel.

  • We will use symbol TSLA since the bid/ask spread is typically wide.
  • The order is designed to calculate the midpoint of the spread and further fine tune the entry price as determined by the offset amount you enter.
  • Enter the symbol in the order entry panel and choose Buy and the quantity.
  • In the order type drop down box scroll down and select “SNAP MID”.
  • Next to the order type drop down box is the offset amount.
  • Choose the amount you want to use for the offset.
  • We’ll use .05 and click “Submit”.

For this purchase the order price will be five cents lower than the midpoint at the time of order creation.  If it was a sale, the offset would be added to the midpoint.

The order confirmation screen will appear. Notice that the Order type will show “SNAP MID and the offset amount will be underneath it. When ready to send the order click, “Transmit”.

The order will appear in the Activity Window, and you will see “SNAP MID” in the Type data Column.

The offset amount will appear in the Offset Amt column. If you do not see the offset amount, click on the gear in the upper right-hand corner and select “Aux. Price” in the Available Columns and add to the shown columns and click apply.

The Snap to Midpoint order type allows the investor to send an order to trade between the spread using the midpoint of the bid/ask price as the reference point.

 


Disclosure: Interactive Brokers

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Supporting documentation for any claims and statistical information will be provided upon request.

Any stock, options or futures symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

Disclosure: Order Types / TWS

The order types available through Interactive Brokers LLC’s Trader Workstation are designed to help you limit your loss and/or lock in a profit. Market conditions and other factors may affect execution. In general, orders guarantee a fill or guarantee a price, but not both. In extreme market conditions, an order may either be executed at a different price than anticipated or may not be filled in the marketplace.

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