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I was trying to buy ProShares Short Dow30 ETF (NYSE Arca: DOG). I put in a limit order at the ask price not the bid price since I want the order to execute all at once. The ask price is a penny more than bid price. So if the ask price is 26.11 and the bid price is 26.12, I would submit a limit order at 26.12. Normally, I would see such an order get executed right away. But for this stock, every time (I tried 3-4 times) I submit a limit order, the ask price and bid price goes up. My bid price becomes the ask price and the ask price becomes one penny more. I feel like someone is doing price matching or is hustling me to higher prices. Volume of ask size is big enough to fill my order right away but my order does not fill. What is going on?

I am trading with Fidelity. Every time I submit an order, the ask price goes up one penny so my order does not get executed. There is also an increase in bid size. When I cancel the order, the bid size decreases by the amount of my order plus some more. Then the ask price goes back down by a penny. I just want the order to execute right away so I am bidding at the ask price and the ask size is three times more than my order size so technically it should get executed right away. Anyway I waited to see what would happen. My order size is 40. The stock got traded at my bid price for many other orders but not my order. The bid size goes up and down to 40 which is my bid size. Then the other orders came in and size went up again and those got traded. I think my order is just sitting at the bottom and get executed only when no one really wants to pay the price I pay. So as soon as my shares got traded, the bid price went down by penny. So I think my trades are placed at the bottom of the queue and other trades are getting done on top of it.

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  • If I am correct DOG is a bear ETF of the DJ. So if the DJ is falling DOG goes up. So you should be tracking what the DJ is doing when putting you're order in.
    – Victor
    Commented Mar 6, 2014 at 22:47
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    If your example prices, the bid (26.12) is higher than the ask 26.11, which shouldn't be possible. (It's called a crossed market, but it ought not ever happen while trading is open.
    – Jaydles
    Commented Mar 7, 2014 at 3:54
  • Crossed markets are rare but they do occur and they last for mere seconds. I think that the OP confused the bid with the ask in his description.
    – Bob Baerker
    Commented Sep 2, 2018 at 19:55

2 Answers 2

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The price is moving higher so by the time you enter your order and press buy, a new buyer has already come in at that time and taken out the lowest ask price. So you end up chasing the market as the prices keep moving higher.

The solution: if you really want to be sure that you buy it and don't want to keep chasing the market higher and higher, you should put in a market order instead of a limit order. With a market order you may pay a few cents higher than the last traded price but you will be sure to have your order filled. If you keep placing limit orders you may miss out altogether, especially if the price keeps moving higher and higher. In a fast moving market a market order is always best if your aim is to be certain to buy the stock.

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    Also, remember that retail orders (like yours) almost never make it to the actual exchanges. They mostly get filled within your retail broker's existing order pool (like their own miniature completely-hidden stock market). There's no telling what shenanigans your broker may be doing to your order to ensure they turn a profit. You should read the fine print in your brokerage contract to see how long they might delay your order, and whether they're under any obligation to send it to an actual exchange.
    – dg99
    Commented Mar 6, 2014 at 21:07
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    @dg99 - this can be reduced by using a broker who employs direct market access (DMA). When I place limit orders with my broker the order goes immediately through, as I can see it instantly appearing in the market depth. When I place market orders I get a quick notification that it has been traded with my successful order details.
    – Victor
    Commented Mar 6, 2014 at 21:33
  • They why does the price go back down when he cancels it?
    – Joshua
    Commented Feb 16, 2015 at 17:02
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An even better solution, one used by successful day traders is to use marketable limit orders. You don't place the limit at the ask where you may not get filled right away but a few cents above ask. This gives you a good chance of getting filled without too much risk. A market order carries a bigger risk. It's not terrible but once in a while you could get a big squeeze and a bad fill.

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