14
votes
Foolish to place orders before the market opens?
This is an old question, but I had the same question and it still goes up high in Google searches.
I found two sources online with the same option:
From Charles Schwab Best practices for trading ...
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13
votes
Why ever use a market order?
The purpose of a market order is to guarantee that your order gets filled. If you try to place a limit order at the bid or ask, by the time you enter your order the price might have moved and you ...
- 21k
6
votes
Accepted
Why ever use a market order?
What you are saying is a very valid concern.
After the flash crash many institutions in the US replaced "true market orders" (where tag 40=1 and has no price) with deep in the money limit orders ...
- 543
6
votes
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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 ...
- 8,801
5
votes
What is the role of a market-maker?
The role of the market maker is to make sure there is a bid and ask on a particular stock. That's it. The market maker ensures that there is a price at which you can buy and a price at which you can ...
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5
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Why ever use a market order?
I think it all boils down to which is your priority.
if it's a limit order
you are being guaranteed that you will never pay more than this amount
but you are not guaranteed of getting the stock
...
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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
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Are there market makers in bonds market?
Bonds are not traded on an exchange like stocks, and so there are no "designated" market makers like for stocks, but there are some brokers that will buy and re-sell bonds to keep liquidity ...
- 131k
4
votes
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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 ...
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4
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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.
...
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4
votes
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What causes stock price to differ from the real time data?
The real time price you are seeing is the last traded price, when you buy or sell sell you move the market (probably by the tiniest bit) by adding volume to one side of the trade book. The price you ...
- 8,801
4
votes
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What happens if a market order is not fulfilled completely?
In order-driven markets the order goes to the book and will be matched with either the next incoming market or limit order of the opposite side.
The rules for the price when the market order hits ...
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4
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Would a market buy order execute at a ridiculous ask price?
My question is would my trade likely have actually executed at that price in the morning
In this specific example unlikely. The ETF is highly traded and the price in the morning when trade would get ...
- 57k
4
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How did my market order not fill on TD webbroker?
The stock market closes at 4:00pm Eastern time. It was too late in the day.
The order may be good for tomorrow. You should check that.
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4
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What is the difference between an Order and a Trade?
From what I understand, an order is an instruction to buy or sell something but trades occur where parties voluntarily agree to exchange one thing for another.
Correct. A trade results from matching ...
- 29.4k
3
votes
Accepted
Functional Question About Maker/Taker Markets
Once an order is on the books, it can only execute at the rate at which it was placed. So once an offer to buy 1 coin at £1000 is placed, whoever takes it -- however they take it -- is going to pay £...
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3
votes
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Which market orders to meet this recommendation : 'Take a position on the purchase of the fooBar share, protect your capital by placing a stop'
You would place a stop buy market order at 43.90 with a stop loss market order at 40.99 and a stop limit profit order at 49.99.
This should all be entered when you place your initial buy stop order. ...
- 21k
3
votes
Accepted
What happens when there are no Limit Orders?
The obvious thing would happen. 10 shares change owner at the price of $100. A partially still open selling order would remain.
Market orders without limits means to buy or sell at the best possible ...
3
votes
Help Understanding Market/Limit Orders and Bid/Ask Price
At any point of time, buyer wants to purchase a stock at lesser price and seller wants to sell the stock at a higher price.
Let's consider this scenario
Company XYZ is trading at 100$, as stated ...
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3
votes
Foolish to place orders before the market opens?
I do the same thing for the same reasons, except that I never use a Market Order.
The Market Order Problem
When you send a market order to your broker, you are saying "I want to by X number of ...
- 5,083
3
votes
Foolish to place orders before the market opens?
More on a technical note, but the spread on an ETF tends to be worst at market open and near market close. (assuming the ETF constituents are traded on a synchronous basis.)
If possible, it's often ...
- 436
3
votes
Accepted
How to estimate the average cost-per-share of a not-very-liquid ETF purchased with a market order?
On U.S. equity markets, volume size represents round lots. Your quote for VGE is:
$53.52 x $53.53 with a volume size of 542 x 134.
That means that there are 54,200 x 13,400 shares available at ...
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3
votes
Trailing Stop Market Order getting Cancelled
I can't answer your question specifically because I'm in the U.S. and this is about a Canadian ETF and a Canadian account. But I can surmise what the reason might be based on what happens here in the ...
- 75.7k
3
votes
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Priority of out of hours sell limit vs market order
Are orders queued, such that a market order made later in the evening would get executed
after my sell limit order?
Yes and no. Orders are Queued - but there are passive and active orders. Market ...
- 11.6k
3
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purpose of making an MOC order
With this type of order (market on close), you participate in a special "closing auction" rather than paying a bid-ask spread as with a normal market order. This can reduce trading costs (...
- 29.4k
3
votes
Accepted
In over-the-counter markets, shouldn't price takers attempt to match each other's prices?
Yes, a price taker buys at ask price and sells at bid price and if the market maker is on the other side of the trades, he pockets the bid-ask spread. Note that trades means a trade at the bid and a ...
- 75.7k
3
votes
How is the price of stock decided in an order driven market?
But when we go to buy or sell, we get only one price or when we search price of a stock we get only one value. Which price is this and how's it calculated?
It is usually the last trade price (i.e. ...
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2
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Why ever use a market order?
The original poster's concern is valid. Sometimes, market orders do get executed at seemingly ridiculous prices.
In addition to Victor's reasons for using a market order, sometimes a seller does not ...
- 3,487
2
votes
Supply & Demand - How Price Changes, Buy Orders vs Sell Orders
Yes for every order there is a buyer and seller. But overall there are multiple buyers and multiple sellers. So every trade is at a different price and this price is agreed by both buyer and seller.
...
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