Pegged-to-Best on the IBKR ATS pegs your order to a price that is one tick better than the Combined NBBO* best bid/offer - up to your defined limit price but no higher than the mid-price - to help ensure a fast fill against incoming orders. If Pegged-to-Best can’t improve on the best price, it will match it (this would occur if the price hits the midpoint). Orders will float both ways with the market to adjust for changes to Combined NBBO*.
In addition to automatically pegging the order price, Pegged-to-Best lets you define an offset used to compete against other Pegged-to-Best orders by making your order more aggressive.
Three user-defined parameters allow you to fine-tune your order:
*Combined NBBO: The system finds a baseline "best" price for your Pegged-to-Best order, which we call the “Combined NBBO.” This value is the better of the NBBO and the IBKT ATS BBO, and we use this as the baseline price to apply the “minimum tick” advantage and the “Compete against” offset.
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The Reference Table to the upper right provides a general summary of the order type characteristics. The checked features are applicable in some combination, but do not necessarily work in conjunction with all other checked features. For example, if Options and Stocks, US and Non-US, and Smart and Directed are all checked, it does not follow that all US and Non-US Smart and direct-routed stocks support the order type. It may be the case that only Smart-routed US Stocks, direct-routed Non-US stocks and Smart-routed US Options are supported.
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