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New investor here, using the Robinhood platform. I quickly learned that placing market orders never really nets you what the app indicates; limit buys and sells fix that. Typically, I assume, limit sell orders fill at the moment a stock's price hits your limit while on an upswing, but I also thought it must be possible to fill a limit sell at a higher price if the market opens higher than that limit. Indeed, I've noticed that when placing a limit order the app tells me my stock will be sold at my limit price or better.

Today I see that my pending limit sell order for PDS at $4.11/share executed at $4.11/share, but the market opened at $4.13 per share, and it was even higher in pre-market.

So my question is, why didn't I get credited at the $4.13 price?

https://www.google.com/search?tbm=fin&q=PDS

PDS price chart, cursor shows price at market open on May 18

  • How do you think the market opened at a higher price? – Joe May 18 '18 at 20:11
  • @Joe The Robinhood app provides this information, and it's also in the linked Google finance chart for the specific stock in question. – randomguy May 18 '18 at 20:35
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    Perhaps there were other sell orders placed before yours? They could have filled all the open buy orders above $4.11. – Craig W May 18 '18 at 20:55
  • I didn't mean "how did you know it opened". I mean, what do you think the mechanism was for it to jump from 4.06 to 4.13? – Joe May 18 '18 at 21:25
  • @Joe Actually, as you can see in Google's chart the previous close was 4.03...and it didn't really "jump" to 4.13, it simply began trading higher in post-market hours and continued to trade higher during pre-market today. If you're asking why, I can't really say. Why do any stocks go up? – randomguy May 18 '18 at 22:53
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I have read some articles that suggest that Robinhood receives payment for routing their orders to specific market makers. I don't know if this is true or not but this can lead to inferior fills.

PDS opened at $4.13 per share and that price is where the first trades occurred. PDS appears to have traded with a one cent wide spread all day but what it was at the open is unknown. If it was $4.11 x $4.13 then since your limit order was to sell at $4.11, you were filled at your limit price. Even if it was $4.13 x $4.14 ($4.14 was the day's high), other orders may have been filled before your order reached the head of the queue and it had dropped to a bid of $4.11 by the time you sold. There's no mystery as to why you got $4.11 instead of $4.13.

Just over 60,000 shares traded in the pre-market, mostly between $4.15 and $4.25. The real question is if you placed your order to sell early in the pre-market, why weren't you filled at a higher price? Check your confirm's time and sales to see when you were filled.

  • Thanks for this answer. I am only allowed to trade during market hours, extra hours trading is available to Robinhood Gold members as I understand. My limit ordered has been queued for almost a month, is it still likely that everyone drained the selling pool before me? I've seen limit sells get executed pretty much instantly as a climbing stock hits my limit...it just seems super odd that a declining stock would trigger differently, and at exactly my limit price no less. I guess I still don't understand. – randomguy May 18 '18 at 23:06
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    What was the time of execution of your order? Did it occur in the pre-market or after 9:30 AM EST? After you spell that out, if you want, I'll try to deal with what you don't understand. – Bob Baerker May 19 '18 at 0:51
  • Here are the details.. Limit Price:$4.11 Entered Quantity: 9 Filled:May 18, 2018, 9:30 AM EDT Filled Quantity: 9 shares at $4.11 Total:$36.99 Settlement Date: May 22, 2018 So when you say Robinhood may route their orders in ways that earn them a profit, could it be that they simply pocketed $0.02 per share of my sale, since the order did still satisfy my limit criteria? – randomguy May 19 '18 at 1:05
  • @randomguy - No, I'm not saying that RH pocketed your 2 cents. If trading at market prices, you buy at the ask and sell at the bid. If the stock's price is rising, your order is executed as soon as you are first in the queue at your limit price and there is a buyer at that price for enough shares. It doesn't matter how high the stock went after your order was filled. The problem I have with this RH story is that pre-market price was higher but your GTC order was not filled until 9:30 AM. – Bob Baerker May 19 '18 at 11:38
  • Pre-market and after-hours trades are only filled for members of RH Gold, which I am not. There are some important details about how that works on their extended trading hours page. So the only logical conclusion is that enough other traders were ahead of me in the queue to snatch up all the selling offers above $4.11, such that when it came time to process my order the best sell price happened to be my limit price. I am curious then, if my limit was at $4.09, would I have still been filled at 4.11? – randomguy May 19 '18 at 20:37
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but I also thought it must be possible to fill a limit sell at a higher price if the market opens higher than that limit. Indeed, I've noticed that when placing a limit order the app tells me my stock will be sold at my limit price or better.

When a limit order is being placed [just when it hits the exchange] for 4.11; it can match to higher buy order for more than 4.11
If the limit order is sitting on exchange [like you mentioned GTC], there is no situation it will match for a higher price. Even if there is a subsequent buy order for higher price, it will get matched to 4.11 or anything below it.

Read more at How do exchanges match limit orders?

Today I see that my pending limit sell order for PDS at $4.11/share executed at $4.11/share, but the market opened at $4.13 per share, and it was even higher in pre-market.

The Google charts are slightly cluttered. See the same in Yahoo charts. At 9:30 the price was 4.11 and at 9.31 the price was 4.135. So my guess is your order got executed at 4.11 first and then there were other orders at 4.13 that also got executed and then the price moved down.

At 9:30
enter image description here

At 9:31
enter image description here

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