In order to bypass the queue and get my orders filled before others, can I sell below the current price and buy above the current price in the stock market? I have found stocks with good liquidity and relatively large prices but am concerned that they will not get filled due to my place in the queue. Is this a good strategy to bypass others in the queue?
I have done this, and the reason is to make sure that I don't run out of money in my account to place the order if there is an unexpected upswing in price.
Suppose I have $1000 in my account and I want to buy 10 shares of ABCD that are currently at $99. If the price doesn't change, then I am all set, but if the price goes up to $101 then I don't have sufficient funds to make the purchase. By placing a limit order at $100 I can ensure that I have enough money to place the order.
In general, it is a rather unlikely scenario that it could happen, but placing the limit order is easy to do and it gives me peace of mind. Also, your broker probably doesn't allow you to place a market order that is close to the available cash in your account so you'll need a limit order to spend most of your cash balance.
I don't know what you mean about bypassing the queue.
You can place the orders like you suggested. This would be useful in a market that is moving quickly where you want to be reasonably sure of execution but don't want the full exposure of a market order. This won't jump your spot in the queue though in the sense that you won't get ahead of other orders that are "ready" for execution just because you have crossed the spread aggressively.
Yes, but you are better off just placing a market order if you want to buy or sell straight away and avoid the queues. A market order will guarantee the purchase or sale of your shares, but it won't guarantee the price.
buy above the current price in the stock market
You can do that, but what is the purpose to do so ? Brokers take the limit price of your order as the highest price you are going to pay. So if an order can be fulfilled below the limit they will do so.
can I sell below the current price
You can put in a order to do so. But what I have seen with my current broker is that the order never reached the market and wasn't executed at all. The broker might have some safeguards or process in place to stop me from doing so. Not sure how other brokers deal with it.
When competing for a better fill on your order, the only way to "bypass others in the queue" is to offer a higher bid (buying) or a lower ask (selling) than others on the order book. These are limit orders. You cannot get in front of someone at a given price who is already in the order book.
If you place a market order to buy at a higher price than the best ask price, you will buy at the ask price. If the size of your order exceeds the current ask volume, you will buy all of those shares and if no one comes in to sell additional shares at that ask price, the next lowest ask price in the book now becomes the best ask price (higher than the shares you just bought). If your buy price meets or exceeds the new ask price, you will buy more shares and the process continues. Selling is the same but in the opposite direction, involving the bid.
If it's a liquid stock and current bid or ask volume exceeds the sze of your order, there's no problem. Placing an order priced too high or too low gets filled at the market. If the liquidity is low, your fill will stair step up (or down) in price. You mat get a partial fill or a complete fill, depending on the available volume between your price and the market price.
An extreme example is trading during the after market. Unless it's a news driven event, liquidity is low. If you fat finger a trade with a horrible price (say a buy order $1 above current price), assuming someone is willing to trade at that price, you will be filled (OUCH!) unless your broker offers an error limiting protective feature in your order settings (% difference).
For an existing position, a Stop-Limit order is one that contains instructions to buy (or sell) when a specified trigger price is reached. This triggers a limit price. For example, you are short shares of XYZ, currently at $50.00. A buy Stop-Limit order of $50.20 / $50.30 will trigger buying at $50.20 and buy all the way up to $50.30, if necessary. The risk with this type of order is that in a a fast market, the Stop might trigger the buy order but share price might move through the Limit price before filling the entire order.
The queue is based on time and price. FIFO. If you want to pay a higher price, above the limit orders appearing on the queue then yes; you will beat the queue and get filled immediately at higher prices.
If you keep buying with market orders then you will keep filling or completeling the sell side of the queue. Ask. However, unless you have infinite funds or have insider info on a news report coming out seconds after you buy; then your high priced trades will be immediately sold down to "equilibrium" or where the market is pricing them. Wall Street will always let people buy high and sell low instantly.
You can see this on tick charts when huge orders are filled or large stop quantity hit; markets jump higher and instantly sold back down so those orders are at a momentary loss. Beating the queue is not possible unless high frequency trader but you can keep limit orders from being filled. Your queue beat comes at a short term loss by using higher pricing to beat it. So yeah you beat the queue but pay more for the asset.
Of course you can and it is with an order called a stop limit order.
mkt trading at 4.04 a share set your limit order to be as high as you want say 5 cents or 10 cents so i will show 2 examples one with 5 cents and one with 10 cents. this is a buy stop limit to OPEN a position. it triggers your limit order (or better) and will not fill you above your limit order. example 1. stop limit set at 5 cents.. stock trading at 4.04 a share.. place buy stop limit at 4.10 a share. when mkt hits 4.10 your buy stop is converted to a limit order at 4.15 or better. If mkt jumps above no sellers except above 4.15 then you will not get filled. if between 4.10 and 4.15 then you get filled immediately.. usually better than 4.15. This way you don't buy too expensive and you limit the price you will pay. EXAMPLE 2. 10 cent buy stop limit to open stock at 4.04...placed buy stop limit order at 4.10 to TRIGGER. mkt hits 4.10 then limit buy order placed at 4.20 OR BETTER.. that is what a LIMIT is..or better. so mkt jumps to 4.16.. you get filled at 4.16 or 4.20 if mkt jumps to 4.21 you will not get filled so you run the risk of missing a move.
Of you placed a buy stop limit wit 1 cent of wiggle room.. then you will get missed a lot.. example.. mkt at 4.04.. buy stop limit to open with 1 cent limit. mkt at 4.04 place buy stop at 4.10 . .mkt hits 4.10.. your limit goes in at 4.11.. mkt trades.. 4.12.. you just got left in the dust amigo!! Goodluck. algos will eat your lunch and dinner all day !!