Suggestions on EU strategy execution - IB linked

General
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Hi all,

i am relatively new to P123, I’ve spent sometime to develop few strategies (US and EU) and last week I decided to go live. I have an IB account connected to P123. I apologize for the many questions, I searched the forum but couldn’t find answers. I wrote to support and suggested me to write here.

A quick recap:

My first approach was to mix US and EU strategies in one live Book and go live with the book - connected to IB.

At the market open (EU first) I realised P123 proposed me to trade both EU and US orders and there was no way to select automatically on the base of the strategy or the market. I picked manually EU orders only.

Than I had to decide which order type to use. For EU orders on IB most of the time I was used to use ALGO - adaptive orders. I noticed on P123, EU markets, there are no algo order: market or limit.

I went of course for LIMIT … after 5 mins from market open. But I realised the only “suggested” limit price was the last from Friday. No live data … so I had to open TWS and read current price and decide limit…. but at the end of the page prices moved a lot already … so my limit price was not always good.

Later I adjusted some of them from TWS. Not sure i did a mistake doing this.

On TWS I can quickly select current mid price and adjust the limit order (or use some ALGO).

In the afternoon I did the same for US orders and I could notice:

-prices are updated live on P123… so setting a limit order is much easier. Why not on EU? Do I have to activate anything from my side?

-few algo orders. On US stocks I am used to select mid price limit order ALGO … it’s an algo on TWS … I couldn’t find it on P123. Am I right?

So, my doubts/questions for you experts are basically:

-does it make sense to have a EU/US strategies book live or is it common practice to create 1 book for EU markets and 1 for US? If not is there any smart way to send EU orders only without selcting them manually?

-what is the best practice for EU orders execution? Limit order and manually put price calculating it from the actual one?

-if I change orders on TWS (after they are prepared and sent by P123) is this s bad practice? I assume P123 will read the final fill even if I change the order time or limit price on TWS. Correct?

-if my previous question understanding is correct, a workaround for EU orders could be to prepare limit orders on P123 with a very far limit price (some exchanges might reject it) and than manages the final executiong and limit price adjustment on TWS… or do you have better workflow to suggest?

-the prices I see in account or strategy report on P123 are the real final filled prices correct? not the ones from the strategy. Commissions? Are the calculated ones or the effective ones applied by the broker? If everything is the real one is there a way to calculate the real slippage? P123 should have the estimated price and the filled one, so there should be this info available.

-I noticed discrepancies from P123 balance and my IB balance which P123 suggests me to close with a manual journal entry (the day after, not the same day). If my assumptions from previous points are correct (P123 reads the real filled price and real commission) the only differences should be caused by: interests (positive or negative), from currency changes and of course any manual transaction I might do on the account including deposit or withdrawals. Am I correct?

-I have a book live, connected to my account. I want to change a live strategy that is in the book because i realised there is a mistake. That is the best practice? I change the settings of the live strategy and wait for rebalance/reconstitute or I create a copy, move holdings and delete original one?

-is there a way to force a rebalance/reconstitute for a live strategy set in automatic?

-One of my EU strategy proposed me to buy RYA which is blocked from IB on EU markets (it’s in close only). I could buy the corresponding ADR (in USD) or skip the purchase. If I buy the US manually I will get the day after a message form P123 asking me to reconcile/link that stock to my account/strategy. Do you think is it good practice to link it to my EU strategy? I went fo the ladder choice (skipped).

Again thanks in advance for your time. I searched ion forum and online help but couldn’t find answers to these doubts.

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Good questions, i am interested in those answers also!

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I agree. One of my goals for 2026 is to evaluate whether it makes sense to automate more of my trading. I’ve been mapping out a growing list of questions around what that would entail.

Because I combine a number of strategies—including some that aren’t on P123—it’s been hard for me to fully wrap my head around the practical trade-offs, especially around execution and workflow.

At a minimum, I know I need to spend some time improving my external tools so things flow more smoothly. I’m interested to keep an eye on this thread!

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No luck here, this post isn't exactly popping :slight_smile:

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IB does not offer execution algos for any markets outside the US (neither for Canada). So not much that can be done. Global live market data in P123 would inquire additional fees and I would argue the tech lift is too big for the benefits. Part of that is the broker internal id’s, in the case of IB the infamous conid’s which occasionally are mapped wrong or to a secondary listing which causes all sort of trouble.

I trade strategies outside the US manually, i.e. I place limit orders within TWS. I also advice not using an algo for illiquid stocks in the US, IB’s performance on the algos is questionable.

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IB does indeed offer execution algos for non-US stocks. There are some markets (Sweden, Poland) in which they're not available, and many stocks in the UK won't work with algos. But I never had a problem using IB algos with Italian or French or German stocks. I agree with everything else SFO says.

I would definitely not advise trading in Europe through Portfolio123's automated trading, which works fine for US stocks. Given that Portfolio123 does not get intraday prices for non-US stocks, it would be hard to adjust orders. I would advise placing each trade by hand or using IB's own API.

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Yes, I do confirm IB algos works on several EU markets (not the mid price, but adaptive for example and others).

As P123 execution is a bit poor on EU markets (compared to US), I agree orders has to be managed manually. It’s a pity.

A good compromise, IMO, would be P123 to “prepare” orders on IB (even when markets are close) but not send them. So order can be manipulated and sent afterward on TWS….

This would minimize mistakes and speed up the workflow.

It shouldnìt be difficult to develop. Maybe this option could be nice for US markets too.

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Yuval, How do you place European algo orders on IB? I use the app but only US listed stocks have the “Order Type” → “Algos” page. Also is IB offering any trajectory algos in Europe (e.g.VWAP) or only Adaptive?

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I’m able to send the following algo order types for EU names from the IBKR mobile app, TWS, and through p123 (at least the subset the p123 supports): Adaptive, Arrival Price, Close Price, DarkIce, Percentage of Volume, Price Variant Percentage of Volume, Size Variant Percentage of Volume, TWAP, Time Variant Percentage of Volume.

I exclude LSE stocks on the AIM segment, since those tend to be much more illiquid and lack algo execution support through IBKR. Otherwise, I’m able to use algos for virtually all orders, maybe save the occassional Nordic or Polish name for which it’s unsupported, but i feel like their support may have widened over the last year or so. If I get rejected on an algo order, I’ll just resend a limit order.

I’m assuming you have an IBKR Pro (vs LITE) account, since you’re using algos for US listed names?

Going back to @lbottan’s original post, I keep my EU strategies separate and mark them as “Early rebalance” so I can send orders Sunday evening (US time).

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In Trader Workstation click "advanced+" to the right of the limit price. You'll see a drop down. Click on Destination: Smart. Then scroll down to IBALGO. Then you can select algos from the list. This works for most European stocks, but algos aren't available for some countries.

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Here:

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Some of my allocations to European models are relatively small, and when I place orders through IBKR’s algos I often get a warning that “the minimum commission will be based on an amount larger than the order size.”

After digging into this a bit (with GPT’s help), it seems like orders in the ~$6k–$12k USD range can fall into a kind of commission “dead zone” on many European exchanges. The % commission under Tiered pricing is lower than the exchange’s minimum ticket charge, so IBKR ends up charging the minimum anyway. One suggestion was that for this style of trading, Fixed pricing may actually be more predictable (and sometimes cheaper) than Tiered for European stocks — unless I increase order sizes or avoid trading below ~$12k per name.

A few questions for those with more IBKR experience:

a) Is there a general consensus on Fixed vs. Tiered?
b) Does that answer differ for US vs. European/foreign exchanges (and can they be set separately)?
c) Should I be avoiding the algos here, or is this commission issue mostly noise?

So far, I’ve mostly responded to the warnings by not using the algo and just placing the trades manually, and it’s been fine — but this keeps coming up and I suspect I may be misunderstanding something about IBKR’s fee structure.

I’m also a bit hesitant to start flipping settings in IBKR without fully understanding the tradeoffs. Any insight from those who’ve been through this would be appreciated.

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One other issue for me is: I can’t seem to trade OSE stocks with any success at all. Maybe I need to request OSE direct permissions in lieu of using Smart routing? It’s extremely rare I ever get a fill, even going above ask.

LSE is also a huge pain, but at least I understand why.

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You can only select tiered vs fixed in the account configuration, so if you’d have to have mutiple accounts if you want to have a mix of both pricing plans.

For the US, I’ve found tiered to yield better commissions than fixed for my trading, especially the more passive fills you get. U.S. and Canadian exchange typically have fixed per-share fees with maker-taker fee structures (rebates for adding liquidity with passive orders, fees for taking liquidty with aggressive orders) to induce market makers to route orders to their exchanges. So if you use tiered in the U.S., you can get these rebates passed through to you which won’t happen on the fixed plan. IBKR’s first example illustrates this.

Most European exchanges, on the other hand, charge exchange fees that are a percentage of the notional value of the order with a minimum and maximum cap per order. That minimum per order exchange fee is probably what IBKR is warning you about here, and as you can see from IBKR's European Fee Schedule, there are minimums that apply to both tiered and fixed plans. Fixed is all-in pricing while tiered will pass through exchange/regulatory fees, but in many cases you may still come out better off with tiered pricing. They have some fixed/tiered examples that you can look through.

More importantly, those minimum order caps will apply to both algo and non-algo orders, so you’re not saving on small order comissions by avoiding algos. How small, in dollar value, were the orders were you sending to get that warning?

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Reading all these issues- is this why there is a lot less HFT outside the US? :joy:

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Thanks so much, Feldy. Very helpful.

I recall looking into tiered vs. fixed way back when and determining that tiered was likely better for me, tho that was before I traded any foreign exchanges.

About the warnings, I only ever got warned when using Algos (adaptive in my case). The specific warning is (in the case of PLN in this example, but others as well):

“warning: algo orders will be charged new commission min and max per 350,000 PLN of trade value.”

In this particular case, I was attempting to buy ~41,500 PLN of a stock which I believe was ~ $11,500 USD worth at the time.

I wasn’t sure if paying the higher commission made sense in this instance or not. I’ve had this for numerous foreign buys when trying to use the adaptive algo. Thank you!

Edit: Another example from my notes: “algo order will be charged new commission minimum and maximum per $100,000.00 CHF of trade value”

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Ok, so it looks like there should be no effect for you given your current order sizes are less than $100,000 USD.

In the disclosures at the bottom of IBKR's commissions for EU stocks, they state:

For European stock Algo orders, IB will apply the commission cap as follows:

For EUR-denominated stocks every EUR 75,000 of executed value a new per order cap will be applied
For CHF-denominated stocks every CHF 100,000 of executed value a new per order cap will be applied
For GBP-denominated stocks every GBP 65,000 of executed value a new per order cap will be applied

For EU algo orders, they’re stating that the maximum per order commission cap applies to each ~$100k of notional value of that order. So for orders like yours, less than $100k, the commission caps are as-stated. If you sent an order for $150k for say a French stock, there’d be a 29 EUR cap on the first $100k of that order’s value and a 29 EUR cap on the next 50k of that order. Even in that case, you’re talking about a difference of few basis points of cost difference vs only having a per order cap.

It makes sense why’d they’d structure pricing this way though. Since each algo order you submit to IBKR could be sliced into many smaller exchange orders, each with their own minimum fee from the exchange, a very large algo order for an EU name could accrue a large number of those minimum fees. This fee structure just makes it more reflective of the true costs incurred to slice and execute your order.

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IB has some sort of deal with an alternative NASDAQ-run exchange in Norway, so Norwegian stocks are really only tradable if they're the most liquid names. After some frustration I just decided never to use IB for Norwegian stocks, and I have friends who decided the same.

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Thank you, Feldy and Yuval! Super helpful and appreciated.

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In case someone else will encounter the missing Algo problem; IB requires “tiered pricing” in order to send to IBALGO outside US securities. It took me (and IB customer support) far too long to figure this out.

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