Duration: 6:25
Level: Intermediate

The Trader Workstation Allocation Order Tool allows an advisor to quickly and accurately allocate a single trade in stocks, options, futures, or future options into their clients’ accounts. Advisors can narrow down the list of eligible accounts by using a variety of filters and choose the allocation method prior to submitting the trade.

Study Notes:

The Trader Workstation Allocation Order Tool allows the advisor to quickly and accurately allocate a single trade in stocks, options, futures, or future options into their clients’ accounts. Advisors can narrow down the list of eligible accounts by using a variety of filters and choose the allocation method prior to submitting the trade. Allocation profiles can also be created and saved for repeated use in the future.

The Allocation Order Tool can be accessed in Mosaic from the Order Entry panel by clicking on the “Advanced” button in the center right. Once the pop-up appears look for the Allocation Order Tool button to the left and left click on it. Whichever symbol is highlighted prior to clicking on the Allocation Order Tool will appear at the top and you can choose between buy or sell.

  • The Allocation Order Tool offers the ability to choose accounts by using multiple filters.
  • You can start by either selecting All or a Group of accounts as well as narrow down the choices to accounts with an existing position.
  • Once you have narrowed the choice of accounts you can use the remaining six available filters by selecting greater than, less than, or in the range of. Four of the six additional filters refer to existing positions.
  • They include Position, Market Value, % of Net Liquidation, and Unrealized P&L.
  • The other two filters are Cash Balance and Buying Power.
  • These are based on your Independent Position and do not take in account any funds allocated to Models.

Let us go through a few examples of using the filter.

First let’s allocate to a Group. In the top left-hand corner, there is an Allocation drop down box, and you can allocate to either all the accounts or a specific Group that you created in the Advisor Set up area. Let’s allocate to the Group Demo1. Only the accounts in the Group are now shown at the bottom.

Let’s reset the allocation to All by scrolling up in the drop-down box and you’ll see that all the accounts now appear.

For our second example we’ll only Include accounts with a position.

Look for the check box underneath Position on the left-hand side and click apply and all the accounts with an existing IBKR position will be checked.

Click the Reset all button on the left side to reset the filters.

The order allocation tool allows you to use multiple filters to narrow down your choices.

Our final example is allocating to accounts with a position greater than 10,000 shares and a cash balance between $250K and $12mm.

Notice it now only has accounts that qualify for both filters checked.

Once you have selected the accounts you can choose the allocation method to use for the trade.

Choose between the following 5 allocation methods.

  • Increase or decrease the position by a certain percentage,
  • Choose a percentage of cash balance or buying power,
  • Allocate total quantity or cash quantity equally or proportionally using position, cash balance, or buying power,
  • Use a percentage from a recent trade, or
  • Enter a custom quantity or cash quantity value for each account.

Now let us go through some allocation examples to show the different number of shares that will be calculated. 

During the different examples you will notice that the shares allocated to each account change depending on the method selected.

First let’s increase the positions by 25%.  Click the blue apply button. The Quantity column below show the shares that will be allocated for the order.

Next, we will Trade a total quantity of 1,000 shares equally between accounts and click apply. All the accounts will now receive equal shares.

Even after setting the allocation method the shares can be manually adjusted.

Manually set the quantity for each account by left clicking on any value in the Quantity or Cash Quantity row and entering the desired value.

The Allocation Order Tool also allows to use the same breakdown from a recent trade.

Left click on “Allocate from recent trade”, choose “Select” and scroll through the list of trades of the past 7 days.

You can narrow down the choice of days available by clicking on the arrow in top right corner and choosing the number of days.

Click on the box next to the trade allocation you want to replicate.

Once the trade is selected click on the ‘Select” button in the bottom right.

Once the allocation method has been selected and applied, click on the “Set Allocation” button at the bottom right of the information box and you will go back to the Order Entry panel.

Notice in the bottom center next to allocation it shows “Custom” and “Edit using Allocation Order Tool”.

Click “submit” and the Order Confirmation window will appear where you can double check that the allocation is correct. As long as the proper funds are in the accounts the Desired should equal the Allowed in the allocation area.

Click Override and Transmit and your order will be sent to the marketplace with the correct pre-trade allocation you just set.

It is recommended that you try this out on your paper trading account until you are comfortable using the Allocation Order Tool.

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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.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Interactive Brokers, its affiliates, or its employees.