IBKR Desktop Pegged to Midpoint Order

The Pegged to Midpoint order provides a means for investors to seek a price improvement at the midpoint of the National Best Bid and Offer, or NBBO. The price automatically adjusts to peg to the midpoint as the market moves in any direction. Currently most venues do not accept an offset from the midpoint, so the Offset Amount box is set to 0.0. In the future exchanges may allow an offset.

Creating a Pegged to Midpoint Order in IBKR Desktop

The order panel in IBKR Desktop can be populated by either clicking on a symbol in the Portfolio or Watchlist screens or typing in a symbol in the search bar. Once the symbol is selected the investor can click “Buy” or “Sell” to create an order window. In this example the investor chooses to create a “Buy” order and can select the quantity, please note that the Pegged to Midpoint Order type is not available for fractional shares. Directly below are three order types; Limit, Market, and Stop. To access the Pegged to Midpoint order type the investor clicks on “Stop” and scrolls in the drop-down box to “Pegged to Midpoint”.

The investor then selects a limit price that the order won’t be filled above for a buy order or below for a sell order.

Next the investor selects the Time-in-force by clicking on the box. They can select Day or Good ‘Till Cancelled, known as GTC. For more information on these terms please see the IBKR Traders’ Glossary..

Submitting a Pegged to Midpoint order in IBKR Desktop

When the investor is satisfied with the order inputs they can either click on “Preview” to see a breakdown of the order as well as its effect on margin, “Save” to save the order to be transmitted later, or “Submit Buy Order” to send the order. The investor chooses “Submit Buy Order” and the Order Confirmation window appears. Once satisfied they click “Transmit” to send the order. Once sent if not filled, the investor can view trades, modify the order, cancel order from the Order Confirmation screen. If the investor clicks on the three dots next to Cancel order they can Pause execution, Duplicate the order, or create the opposite order ticket.

The Pegged to Midpoint order type allows the investor to send an order to trade at the midpoint between the spread that will adjust as the spot price moves.