# How to execute a large stock purchase, relative to the order book?

I am looking to buy my first stock, it is TLN, and I want to buy about 3300 stocks. Looking at the order book on yahoo, it looks like this:

Bid Price Size

10.46 200

10.45 100

10.44 100

10.43 100

10.42 100

10.48 100

10.49 200

10.50 100

10.51 200

10.52 100

From my understanding if I place a market order I will buy shares from the ask side until my order gets fulfilled. Let's say that there are 100 shares for each price point, from 10.48 up to 10.82. That is a 10.65 average price, and it looks like I will pay 0.17*3300 = $561 more that the 10.48 price (today it never went above 10.50, 10.05.13 12:45 PM). On the other hand if I place multiple 100 stocks orders I am certain I will get a price closer to 10.48, but it will cost me$8*33 = $264 in commissions.$265 is a bargain compared to the $561, not to mention that if I ask 3300 shares I might have to deal with high frequency trading, and end up paying way higher price than what I calculated. If I place a stop order, the order may never get executed. This is my first attempt at buying a stock and I might be wrong in many of my assumptions. • Where is your figure of$8 comission coming from? Is your broker charging you a fixed fee per trade? What about the brokerage cost for single trade of 3300. What makes you certain of getting the stock at 10.48 with multiple trades but not with a limit order? Oct 5, 2015 at 17:08
• Use a limit order - you can keep your order open for a week and it will fill at the limit price or better.
– Ross
Oct 5, 2015 at 17:50
• I don't see a question here. That would be a good place to start. Oct 6, 2015 at 1:08

What is the average daily volume traded? It looks like this stock may have a liquidity problem. If that is the case I would not buy this stock at all as you may have the same problem when you try to sell it.

Generally try to stay away from illiquid stocks, if your order size is more than 10% of the average daily volume traded, then don't buy it.

I usually stay away from stocks with an average daily volume of less than 100,000.

I am able to place an 'all or none' order with my broker. But doing so reduces the number of potential sources to fulfill the order. As others have mentioned, try a limit order to get a specific price.

I normally just do a buy limit at the price I want to buy it at. Then it executes when it's that price or lower, but there's still a chance you might purchase some shares at a larger price. But since we're small fry and using brokerages, there's not much we can do about it.

• Please explain what you mean by "there's still a chance you might purchase some shares at a larger price". How can you get a fill above the limit price you specify??
– user12515
Jan 19, 2020 at 2:34
• A buy limit is just a market price order triggered at a specific price, so If it bounces up a second later your average could potentially be higher than the trigger price Jan 19, 2020 at 2:36