47
votes
Does it make sense to repeatedly increase your limit order price in small increments until your order fills?
"If the price dips .01 before I hit enter, my method saves me .01!"
And what happens if the price bumps up .01 before you hit enter? And then you raise it a smidgen, and the price bumps up ....
- 41.5k
43
votes
Why don't traders place limit orders at all prices to be first in line when the price moves?
A limit order is an order to buy or sell a product at a specific price or better. For a buy order, you might buy for lower than the limit. For a sell order, you might sell for more than the limit.
If ...
- 779
35
votes
Accepted
How is limit order handled right at market opening?
From my understanding, my limit order is run/executed in any case since I made a limit order at x, and the share price must be a continuous function. The cases x<y and y<x at the instance of ...
- 16.9k
23
votes
Does it make sense to repeatedly increase your limit order price in small increments until your order fills?
I don't see how your approach achieves anything.
If the current price is 21.9, then offering to buy at a limit of 21.8 will always fail. Even 21.89 will fail. You'll end up increasing the limit bit ...
- 9,717
21
votes
Why don't traders place limit orders at all prices to be first in line when the price moves?
In a reply to one of the comments, you state: "Isn't [getting the transactions filled] a good thing? Isn't that the whole point of placing an order and being the first in line? What's the point ...
- 41.5k
18
votes
Accepted
Why use a stop-limit order instead of a limit order?
Stop orders wait until a particular (adverse) condition is met before turning into a limit order.
On the sell side:
If the price is currently $40 and you submit a limit order to sell at $36, it will ...
- 15k
18
votes
Does it make sense to repeatedly increase your limit order price in small increments until your order fills?
You're basically emulating what a market order will do. Thought at a much slower timescale.
You can claim that you're saving pennies here and there, but you have to remember that every time you change ...
- 478
17
votes
Accepted
What is the final price if the bid price exceeds the ask price in an order driven market?
The earliest order is the price.
If the seller submits a Limit Order to Sell at $10 at 9:30 AM, it will enter the order book and $10 will be shown to the world as Best Ask.
Then if the buyer ...
- 10.2k
14
votes
Why use a stop-limit order instead of a limit order?
The investopedia article gives a decent example:
For example, assume that ABC Inc. is trading at $40 and an investor wants to buy the stock once it begins to show some serious upward momentum. The ...
- 129k
9
votes
Why don't traders place limit orders at all prices to be first in line when the price moves?
It would make sense for an investor or trader to place a limit order in advance to close an existing position at a better price.
For new positions, traders might be less inclined to have limit orders ...
- 75.7k
8
votes
Order filled above limit buy price?
If you placed a limit order to buy USO at $13.22 and your fill price was $13.38 then:
You placed the order incorrectly (a market order?)
You're looking at the cost basis which includes the commission
...
- 75.7k
8
votes
How is limit order handled right at market opening?
the share price must be a continuous function
Even if this were true, at least 17.5 hours pass between the close and the next open in US stock markets. The "true" price can change ...
- 29.4k
7
votes
What is the farthest someone would likely be stopped out from their stop loss without setting a stop limit?
It depends on how you place your stop order and the type of stop orders available from your broker.
If you place a stop market order and the following day the stock opens below your stop your stock ...
- 21k
7
votes
Why don't traders place limit orders at all prices to be first in line when the price moves?
why don't traders enter limit orders at all prices, so that they could be first in line when the price moves?
Because when the price moves to your limit, you aren't "first in line": you've ...
- 3,131
6
votes
Accepted
Help Understanding Market/Limit Orders and Bid/Ask Price
Your logic breaks down because you assume that you are the only market participant on your side of the book and that the participant on the other side of the book has entered a market order.
Here's ...
- 8,630
6
votes
Accepted
How to set a sell limit order that will actually execute?
There is no perfect answer to this question, and you will always have a tradeoff between likelihood of executing the order and the price you wish to achieve.
The only way to be certain to execute ...
- 558
6
votes
Accepted
How are limit orders executed at market open when the bid price is above the ask price (negative spread)?
This is governed not by the brokerage but by the exchange, specifically the "opening rotation" procedure. If there is a sell (limit) order at $10 and a buy order at $11 going into the open, the first ...
- 29.4k
6
votes
Accepted
What are the risks of placing limit orders on illiquid securities without knowing the Level 2 quotes?
A buy limit order is an order to purchase a security at or below a specified price. That guarantees that you pay no more than your limit price.
The only downside risk that you face is that your ...
- 75.7k
6
votes
Accepted
Why didn't my buy limit order become the highest bid?
Odd lots (less than 100 shares) are not covered by NBBO regulations and they do not update the quote. Read this.
- 75.7k
6
votes
How is limit order handled right at market opening?
The market is an auction and a security's price is determined by supply and demand. If there is a order imbalance (net excess buy or sell volume), overnight price will change. This may occur during ...
- 75.7k
6
votes
Does it make sense to repeatedly increase your limit order price in small increments until your order fills?
I do not see how your mechanism is beneficial for a couple of reasons.
First, when you place a limit order, it is an upper (or lower) bound. If the market maker can improve upon it, they are ...
- 4,267
5
votes
Can I place a stop loss and a limit sell at the same time?
This is sometimes called a bracket order and can be done for stocks. It is offered by some brokers, but not all. It does take slightly more sophisticated infrastructure for the broker to support, so ...
- 3,709
5
votes
Accepted
How are unmarketable market orders (other side of the order book is empty) matched with incoming orders?
I don't have all the answers.
On a illiquid stock, such situations do arise and there are specific mechanisms used by exchanges to match the order. It is generally not advisable to use market order ...
- 57k
5
votes
Accepted
Are bid and ask prices set by the market directly, or by the market makers?
In the absence of liquidity, the market maker sets the price because hardly anyone else is offering to buy or sell the security. If traders put in more competitive bids and offers, the spread narrows.
...
- 75.7k
4
votes
How will a limit order be executed when the stock market opens if there is a large change from the price of the day before?
The next day the market opens trading at 10.50,
You haven't specified whether you limit order for $10.10 is to buy or sell.
When the trading opens next day, it follows the same process of matching ...
- 57k
4
votes
Accepted
Would it be considered appropriate to use a market order for my very first stock trade?
Difference between a limit and market order is largely a trade-off between price certainty and timing certainty.
If you think the security is already well priced, the downside of a limit order is the ...
- 436
4
votes
Would it be considered appropriate to use a market order for my very first stock trade?
If you want to make sure you pay at or below a specific price per share, use a limit order.
If you want to buy the stock close to the current price, but aren't price sensitive, use a market order.
...
- 372
4
votes
Accepted
How does a limit order work for a credit spread?
As you probably know, a credit spread involves buying a call (or put) at one strike and selling another call (or put) at another with the same maturity, so you're dealing with two orders.
Your broker ...
- 129k
4
votes
How to place an order which will book profit at 400 also will book profit at 378?
You would place a conditional order with a stop loss at 378 and take profit limit order 400.
The stop loss will only be triggered if prices fall to or below 378 and the take profit order will only ...
- 21k
4
votes
About Sell Stop loss order
A "stop-loss" order is an order to enter in a market order if the price goes below a certain point. It doesn't guarantee execution at that price.
Where this can go bad is if the price drops ...
- 129k
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