Overnight Trading at Interactive Brokers Using TWS

Study Notes:

Interactive Brokers offers trading in overnight hours for over 10,000 US-listed stocks and ETFs. Market data is provided for free, and existing US stock trading permission is sufficient to allow trading. Trades can be placed within TWS, Client Portal and Mobile TWS. Overnight trading hours are from 8:00pm ET to 3:50am ET with the first session beginning on Sunday at 8:00pm ET and the last session ending at 3:50am ET. Trades executed between 8:00pm and 12:00am will carry a trade date of the following day. For a full listing of the available stocks and ETFs see the exchange listing page on the website.

Interactive Brokers has partnered with liquidity provider Blue Ocean to offer access to streaming quotes beyond the two typical sessions – regular and extended US-trading hours. It is important to note that orders intended for overnight trading are treated separately from orders submitted during the day, or where submitted orders use the extended trading hours time-in-force designation. In other words, investors should think of overnight orders as an independent venue. 

Within the Order Entry panel inside TWS, users can see the order destination or routing flow by clicking the Advanced expansion menu to the lower right. In the Destination drop down menu in the upper left of the Advanced pop-up window, click the down arrow to reveal the exchange and routing menu. By default the selection is set to SMART. Within the list there are two possible venues whose selection would permit overnight trading: IBEOS and Overnight.

IBEOS is IBKR’s internal overnight venue.

OVERNIGHT combines internal and external liquidity providers to display the live NBBO for all available liquidity. It is not necessary to open the Advanced menu and manually select the OVERNIGHT destination, as we have automated that process for your convenience. Let’s demonstrate this within TWS. 

Enter a ticker symbol in TWS. Select Buy or Sell and enter a number of shares in the quantity field. Due to the less liquid conditions in thin markets outside of regular trading hours, clients are restricted to limit order types, and therefore should enter a limit price. From the time in force dropdown menu, check the Overnight Trading box. A yellow crescent moon icon appears to the left of the time in force selection box, which is set by default to Day. 

Note: Overnight orders remain in the system for a single session and is considered a “DAY” order. If they do not fill overnight, the order will expire and disappear. The client would need to resubmit another overnight limit order the following day. 

When satisfied, click Submit to send your order. The order will appear in the Activity Panel to the lower left of Mosaic TWS. Live orders may be cancelled or amended from here.