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 ...
- 17.2k
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 ...
- 43k
18
votes
Did the recent trend among stock brokers to switch to commission-free stock trades result in a degradation in trade execution quality?
Maker-taker fees have existed for over 20 years since the Island ECN created the concept. For those unfamiliar with this, those who trade at the bid or ask (takers) pay a very small fee. Those who ...
- 77k
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 ...
- 77k
8
votes
Did the recent trend among stock brokers to switch to commission-free stock trades result in a degradation in trade execution quality?
Firstly, one has to distinguish between maker/taker (M/T) pricing and payment-for-order-flow (PFOF). These two things are often conflated by the media as 'rebates'. They are quite different:
Maker / ...
- 5,173
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 ...
- 30.3k
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 ...
- 3,151
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 ...
- 77k
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 ...
- 77k
4
votes
Accepted
Choosing the proper order type to preserve profits on crypto exchanges
If you send a limit order to sell at 1800 and the market price has liquid buyers, at say 1900, most exchanges will match the order to the 1900 buyer and get you the improved price.
The order type you ...
- 5,768
4
votes
What kind of order review does TD Ameritrade do on a simple and small buy limit order for a stock traded on the NASDAQ?
One possibility is that you have entered a relatively large order, and the brokerage firm has flagged your order to prevent costly fat finger errors. On 2021-06-14 (i.e. the day before you placed your ...
- 17.2k
4
votes
How is limit order handled right at market opening?
The idea of a stock having a concrete price at any given moment in time is a description of the stock market, not a fundamental reality.
When you say things like:
From my understanding, my limit ...
- 141
3
votes
Why does my stockbroker allow trading at the close but not at the open?
If I understand everything correctly, TD Ameritrade does support market-on-open orders. Simply submit a market order while the market is closed, and it will be executed as a market-on-open order when ...
- 3,447
3
votes
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 (...
- 30.3k
3
votes
My share sell price is lower than the price people are buying yet no sale?
I'm trying to sell some shares at a sell price of 0.5. I can see from the buy/sell history over the past few days that shares are being purchased for 0.6 and others sold for 0.4.
You are looking at ...
- 17.2k
3
votes
Is it possible to fail to receive my shares even though the buy order was successfully executed?
Stock exchanges in the US have T+2 settlement, which means that when you buy stock it's actually delivered to you (or more usually your brokerage account) two days later. Occasionally the counterparty ...
- 149
2
votes
Accepted
Quality of price when trading less than 100 shares
In the past 20 years I have traded odd and mixed lots many, many times and I have never not had an order filled in toto if NBBO size was larger than my order. It may be because my broker offers ...
- 77k
2
votes
What causes stock orders to execute outside the NBBO?
The fact that you can send an order to an exchange that is not necessarily having the best offer. The NBBO is an artificial created in a data center. Orders do not execute there, they execute on ...
- 11.6k
2
votes
Why are liquidity suppliers willing to provide "price improvements" when executing orders?
Imagine you have an equity trading at a spread of 50 vs 51.
You have a solid idea the correct price of the equity is the exact midpoint of 50.5, as well as the ability to move very quickly when you ...
- 5,768
2
votes
Should I consider the bid-ask spread as part of the transaction cost of a market order?
What you pay for the security when you buy it is the cost and what you receive for selling it is the proceeds. These are the numbers that you 'record' and they are used for determining P&L, ROI, ...
- 77k
2
votes
Should I buy or sell stocks during the opening and closing auctions only?
Most days, the opening 1/2 hour to hour tends to be more active because of the volume of news stories overnight. Volatility is a trader's best friend. But that doesn't mean that it's the best time of ...
- 77k
2
votes
Accepted
Can I place limit orders (like limit, stoplimit, trailstop..) in bonds (treasury bonds, municipal and other types of bonds)?
Generally speaking, bonds trade OTC (over the counter), whereas stocks trade on an exchange. As a consequence, exchange-specific order types are irrelevant/unavailable since your broker will quote you ...
- 8,557
2
votes
Broker executed market order far outside spread
A market buy order means "buy at whatever the market is currently asking for" which is the ask.
It's possible you got front-run (someone else took the ask before you could) or the ask that ...
- 142k
2
votes
Is it normal that some brokers don't post orders to exchanges?
Depends. When routing your order through pools first (e.g. you broker does PFOF, https://www.investopedia.com/terms/p/paymentoforderflow.asp) the Order would indeed not show up on the exchange. ...
- 161
1
vote
Is zero commission stock trading dependent on payment for order flow?
No, there are other income methods, in the case of Schwab, Fidelity, Vanguard, there are fees related to their funds, 0.03% of SWTSX is a lot of money. Net interest margin is a big contributor as ...
- 49.1k
1
vote
Why don't traders place limit orders at all prices to be first in line when the price moves?
The short answer is that they do.
Well, they do in the markets where this matters. In volatile markets, queue priority doesn't matter, you'll get filled at the back of the queue whatever.
But in big ...
- 111
1
vote
US stock market: How do odd lot orders get filled if they are not advertised to the public?
The "public list" is called the "NBBO" or "National Best Bid or Offer", which is generally data disseminated through the "official" market data distribution ...
- 5,173
1
vote
What is the relevance of price-time priority when each stock trades on many stock exchanges?
An order is only valid for a given stock exchange. So for example, if you want to buy Microsoft, you can either buy it in New York (NYSE:MSFT) or in Frankfurt (FRA:MSF). So you submit a limit order ...
- 7,462
1
vote
What type of orders fit my strategy in a way that two triggers might be needed?
Quoting @Fattie:
Those orders (beyond the basic ones) are a feature of the software of your broker.
Here's a broker that offers over 50 types of orders for stocks. See if one of them suits your ...
- 77k
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