1

Say the price of a stock is $3.00 a share. At 10:00am Bob places a buy stop order for $3.02. At 10:01am, Mary places a market order for the exact same number of shares. Right after Mary places her order and before it can be filled, the price jumps to $3.07 and continues to climb. Since it's above $3.02, Bob's order will be converted to a market order. But, which order would get filled first (i.e. for the cheaper price on the climbing stock price)?

2

Mary's market order places a priority on execution, not price so it is immediately routed to the exchange to be filled immediately.

Bob's stop order places a priority on price and it will be executed only if a certain price is reached. When that price is reached, the stop order becomes a market order.

If there are limited shares available at a lower price, Mary will have first dibs on them. Bob will also be filled at that price unless share price rises before his order reaches the head of the queue.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.