Handling of market orders

Clients are encouraged to consider the use of limit orders in lieu of market orders as market orders are susceptible to being filled at prices far lower/higher than the current displayed bid/ask particularly under volatile market conditions, in the case of large order quantities and/or orders involving illiquid products.  To protect the client as well as IB from losses associated with significant and rapidly changing prices, IB may simulate client market orders as market with protection orders, establishing an execution cap percentage points beyond the inside bid/ask. While this cap is set at a level that is intended to balance the objectives of execution certainty and minimizing price risk, there exists a remote possibility that the execution will be delayed or may not take place.

In addition, it should also be noted that certain exchanges impose, as a protective measure, their own price caps or bands upon market orders, at levels which can be more or less restrictive than those imposed by IB and which may similarly affect the speed and certainty of order execution.

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