Buy limit order for ticker with no asks impossible at Interactive Brokers

[wachtwoord]

Hi,

 

I'm trying to send a buy order for an OTC with no asks at Interactive Brokers. However, Interactive brokers doesn't send the bid to the exchange until there are at least 2 active asks (it remains blue and will not go to the green status). Today the stock traded at my exact bid price but I did not get filled and the bid is still not send to the exchange.

 

I have had a ticket with Interactive Brokers since last week and after I asked what I can do about it today I received this response:

 

Again a Pink/OTC order is not routed out from IB unless there are at least 2 active Bids for a Sell order or 2 active Offers for a Buy order. The bid/ask market for COMX is "2.10 at No Offer" so your order is held by IB. The NASD Rule 2320 (Finra 5310) requires that a member obtain multiple quotations to determine the best inter-dealer market for a security. This rule applies to non-Nasdaq securities (OTCBB and Pink Sheet stocks) in an inter-dealer quotation system that permits quotation updates on a real-time basis.

 

IB does not trade against customer orders and will not take the other side of your COMX order. Other firms may trade with a customer's order out of their inventory but IB does not so your order has to wait to be routed out until there are at least 2 active Asks. There are no exceptions to the IB order routing of Pink/OTC order.

 

Is this really how it works? Does anyone know how to work around this annoying limitation? Even placing an ask myself (way above my buy) does not fix the situation.

 

Thanks!

[bobp]

Etrade let me place a bid. I was just curious. There's one offering showing now at 40 so maybe placing a sell order would work now.

[wachtwoord]

Etrade let me place a bid. I was just curious. There's one offering showing now at 40 so maybe placing a sell order would work now.

 

The 40 offer is mine trying to get the bid to the exchange. it didn't. Thanks for trying.

 

I just don't understand the logic behind this. I want to buy at a certain price and someone wants to sell for that price. why can't we trade? Also why is IB saying they would need to take the other side of the trade?

 

PS: Same problem for ADDC

 

[Spekulatius]

Seems odd. I know that there are a few OTC stocks that IB does not let you trade in (typically ones that don't trade in month) You can also trade in securities without even having market data (in contradiction to above statement) - you will get a warning message that you need to confirm, but they will let you make a trade.

 

For OTC stocks, E*TRADE is quite good.

[wachtwoord]

Seems odd. I know that there are a few OTC stocks that IB does not let you trade in (typically ones that don't trade in month) You can also trade in securities without even having market data (in contradiction to above statement) - you will get a warning message that you need to confirm, but they will let you make a trade.

 

For OTC stocks, E*TRADE is quite good.

 

IB doesn't allow trading in grey market stocks (example: http://www.otcmarkets.com/stock/SIMA/quote )

 

I already own both ADDC and COMX. It's just that there are not enough outstanding asks apparently. Some more info I just received on my ticket:

 

Yes you are correct you can not buy the shares of COMX in your IB account at this time. You can trade the symbol at other firms if they manually enter orders or trade with you out of their inventory. Again, IB is an electronic direct access broker and we do not trade against your order or enter manual opening orders for any account.

 

-IB Order Routing and Payment for Orders Disclosure

 

https://gdcdyn.interactivebrokers.com/Universal/servlet/Registration_v2.formSampleView?ad=order_routing_disclosure.html

 

--The Order Routing information is also in your IB User Agreement :

 

https://gdcdyn.interactivebrokers.com/Universal/servlet/Registration.formSampleView?ad=us_customer_agreement.html

[TwoCitiesCapital]

I think it may also depend on how your account. For instance, IB won't allow me to trade FNMA in my individual account, but allows me to in my IRA. Don't really understand the reasoning there - just know I get errors in my individual account every time I've ever tried to purchase it.

[wachtwoord]

I think it may also depend on how your account. For instance, IB won't allow me to trade FNMA in my individual account, but allows me to in my IRA. Don't really understand the reasoning there - just know I get errors in my individual account every time I've ever tried to purchase it.

 

That's very weird. FNMA trades on one of the highest OTC Markets levels and is fully reporting (not dark at all). As far as I know IB only explicitly blocks grey markets. And apparently if there are not enough bids asks.

[maybe4less]

I think it may also depend on how your account. For instance, IB won't allow me to trade FNMA in my individual account, but allows me to in my IRA. Don't really understand the reasoning there - just know I get errors in my individual account every time I've ever tried to purchase it.

 

You probably have the "Penny Stock" Trading permission enabled in your IRA, but not in your individual account.

[benhacker]

You probably have the "Penny Stock" Trading permission enabled in your IRA, but not in your individual account.

 

Yes, this is your issue.