A Sneak Peak at FIA 2007: Bracket Orders and Trailing Limits
CQG will again this year at the FIA be displaying some of our latest developments for traders. Here, I will give you an early view of two of our latest work for traders using CQG for order routing: bracket orders and trailing limits.
Bracket orders
Bracket orders are an OPO (order-places-order) combined with an OCO (order-cancels-order). The concept is that traders may place a trade and they then place a target order to take a profit, which is linked to a stop loss order to limit the loss on the trade should the market go against the position. These two orders are OCO, so if one is filled, the other order is automatically canceled.
The Bracket Order functionality is selected from a pull down menu on the DOMTrader or the Order Ticket.
Then, if you place a limit order to buy or sell, the Bracket Order Confirm window opens for you to set the profit target and stop loss price levels. You can use points (ticks) or a dollar value. In addition, you can use either a Limit order or Iceberg order for the target price. For the stop loss order type, you can use a regular stop/stop limit, trailing stop/trailing stop limit of the new DOM Triggered Stop (DTS), which was originally called the Quantity Triggered Stop (QTS). The DTS order allows you to pick a level in the bid/ask order queue the amount of resting orders have to drop below before your order is sent to the exchange. The DTS places your stop order at the back of the order queue.
The next image is the DOMTrader, we can see the limit bid was filled at 1457.00 and there was an OCO order placed to sell at 1459.00 Limit, and a trailing stop was placed at 1455.75. The trailing stop price trigger level has moved up to 1456.00 because the market climbed one tick and the trailing stop climbed with it.
Trailing Limits
Trailing Limits are similar to our Trailing Stops.
Once a Trailing Limit is placed, the CQG Gateway will automatically adjust the
price level of the order. The preferences allow you to pick whether you buy order tracks the best bid, best ask, or last trade. Same for you sell order. These preference settings are very important depending on the market you trade because some markets the difference between the best bid and best offer can range from two to four ticks.
The value here is that if you placed a limit bid to buy in the best bid order queue and say you set the preferences to track the best bid for buys, if the best bid climbed one tick then your bid is automatically updated and moved up one tick. The goal is to get your bid into the best bid order queue as fast as possible, so you are near the start of the order queue, not at the back.
You can select the Trailing Limits from the pull down menu on the DOMTrader and the Order Ticket.
Summary
Bracket Orders, Trailing Limits, Trailing stops, and DOM Triggered Stops, are more examples of CQG development of order routing solutions. There are more to come.