Duration: 4:48
Level: Advanced

The Interactive Brokers (IBKR) IBUSOPT order destination supports One-Cancels-Another (OCA) order attribute, allowing the investor to set up multiple option orders while limiting the overall fill quantity.

Study Notes:

What is a One Cancels Another (OCA) or One Cancels Other (OCO) order attribute?

An investor can place multiple option orders using the “One-Cancels-Another” or OCA order attribute in the Interactive Brokers (IBKR) Trader Workstation (TWS) Mosaic order entry panel with the aim of filling one of them completely and automatically cancelling the others or partially filling more than one to equal a final quantity.

What is the IBUSOPT order destination?

Interactive Brokers’ (IBKR) IBUSOPT destination allows the investor to rest liquidity adding option orders and interact with other IBKR investors who send marketable market and marketable limit SMART-routed orders.

An investor may want to use the IBUSOPT and place orders in multiple strikes in an expiration using the One-Cancels-Another order attribute to manage the overall quantity that can get filled. This will allow the investor to potentially get a better fill than the National Best Bid and Best Offer (NBBO) while not showing their orders to the public until they are matched up with an IBKR SMART-routed customer order and sent to an exchange for execution.

How does an Investor use the One Cancels Another (OCA) or One Cancels Other (OCO) order attribute?

Using the TWS Mosaic Order Entry panel, during the creation of the option orders an investor can route an order directly to the IBUSOPT destination by using the Advanced window area.

In the Order Entry panel, the investor opens the Advanced window by clicking on the plus sign on the Advanced button. Locate the Destination button in the top left corner. To locate IBUSOPT, the investor should click on the white arrow on the Destination tab, scroll down, and choose IBUSOPT by clicking on it. The Destination button will now show IBUSOPT. The investor can also select the order type, price, and time in force.

Once the initial order has been set up, the investor can set up a One-Cancels-Another (OCA) group or create multiple orders using the OCA order attribute. In the Advanced Window, the investor clicks on the plus sign next to One Cancels Another and then the plus sign next to Add order.

The investor should choose an order side, select the contract, and then click on the plus sign next to the Advanced button on the order line and follow the same steps as entering the initial order.

It is important to note that the investors should direct the additional orders to the IBUSOPT destination and that they will not automatically be set to be directed there. When completed, the investor can add multiple orders one at a time by clicking the plus sign next to Add order after each desired contract is entered.

Once the investor has finished setting up the OCA orders, they can choose how the group handles partial fills by selecting one of three choices from the On fill drop down box:

  • Reduce other orders: which reduces the quantity of other orders in the group by the partially filled quantity of the order. Please note that using this option without overfill protection may result in multiple orders being routed to an exchange, which may in turn result in an overfill, or in a rejection.
  • Reduce other orders, overfill protection: which is designed to reduce quantity of other orders in the group by the partially filled quantity of the order, and specifies that only one order at a time will be submitted to an exchange to avoid multiple orders filling or an overfill. Or
  • Cancel other orders: in which case all orders in the group will be canceled. When selected, “overfill protection” is automatically enabled to prevent an overfill.

How does the investor send a One Cancels Another (OCA) order in IBUSOPT?

To submit the order, exit out of the Advanced window by clicking on the red X in the upper right-hand corner and when ready, click Submit in the bottom right-hand side of the order entry panel.

An order confirmation window will appear displaying all of the created orders along with the name of the OCA group. When ready, click Transmit. The orders will appear in the Activity window with IBUSOPT in the Destination column and the name of the OCA group in the OCA group column.

Please note that because the OCA procedure is an automated process, there is no guarantee that requested cancellations and modifications will reach the specific exchange before an order has been executed.

Additional Resources

IBUSOPT Order Destination

One-Cancels-All (OCA) Order Type

TWS User Guide

Leave a Reply

Note that all comments are held for moderation before publishing.

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 LLC, its affiliates, or its employees.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

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.

Disclosure: Options Trading

Options involve risk and are not suitable for all investors. For more information read the “Characteristics and Risks of Standardized Options” also known as the options disclosure document (ODD). To receive a copy of the ODD call 312-542-6901.Multiple leg strategies, including spreads, will incur multiple commission charges.