Market order to sell short... but no shares?

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Market order to sell short... but no shares?

posted Dec 14, 2015

How does IB/Quantopian handle such a scenario? I am guessing the order is immediately canceled, but it is possible IB keeps the order active until shares are found.

Thanks for the help!

4 responses

Simon Thornington

It depends, I think it's rejected if it's not shortable, but held if there are simply no shares to borrow. Quantopian will always fill it regardless (in simulation).

Simon Thornington

In my hedged basket algo I deleverage if one leg has failed to fill sufficiently to satisfy my hedge ratios to within some tolerance.

Thanks Simon, so it doesn't appear to you that IB holds the market order until shares are available, right?

Simon Thornington

They do do that, yes. You have to be prepared for short orders to be rejected or held indefinitely.

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In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.