Dark Ice

Study Notes:

The Interactive Brokers Dark Ice algorithmic order type is like an Iceberg order type but also randomizes the display size by plus or minus fifty percent based on the probability of the price moving favorably. The algorithm uses calculated probabilities to decide whether to place the order at a limit price or 1 tick lower than the current offer for buy orders and 1 tick higher than the current bid for sell orders. An investor may want to use the Dark Ice algorithm if they are looking to keep the majority of the order size private from the outside markets.

The Dark Ice algorithmic order type is accessible in Classic TWS, Mosaic, and Mobile. To use the Dark Ice order in Mosaic the investor should enter a symbol in the top left of the Order Entry Panel, choose buy or sell, and select the quantity, in this case a ten thousand shares. Click on the Order type drop-down box, scroll down to IBALGO, and select Dark Ice.

The advanced window will appear, displaying Algo parameters for DarkIce in the first drop-down line. The investor chooses the display size, which is randomized by fifty percent. For this example, choose 200 shares. The investor can also change the default start time from the time the order is entered to a later time and enter an end time if they choose. Lastly if the investor chooses an end time, they can choose to allow the algorithm to continue working past the end time if the order is not completed. This only applies when an end time has been specified and only Day orders are supported by the Dark Ice algorithmic order type. Also note that market orders are not supported, and the investor must set a limit price.

When ready to submit the order close out the advanced window and click submit in the order entry panel. A trade confirmation window will appear showing a recap of the trade criteria selected including:

• Order Type DarkIce IBAlgo,
• Strategy = DarkIce,
• Display size = 200 for this example,
• Start and End time if selected
• As well as Yes or No for Allowing trading past end time

When ready click on Transmit to send the order. The order will populate the Activity Window Order tab and show DarkIce in the Order Type column and the investor can monitor the progress of the order.

Dark Ice Order Type

IBKR Algos User Guide