43

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 you have a buy order at $10 in your example, then you are already covering every price increment up to that price with your limit order; someone may sell to you ...


35

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 market opening can not occur since that would mean that the value can be arbitrary at market opening. No, share prices do not have to be continuous, and the ...


21

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 of placing orders if they never get transacted?" The point of placing an order isn't just to 'get it filled', it's to get it filled at a price you are happy ...


18

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 provided liquidity, or 'makers', receive a slightly smaller fee than the 'taker' fee, with the exchange earning the difference. This model attracts order flow ...


12

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 might need to keep amending your limit order in order to buy or sell, and as such you start chasing the market. A market order will guarantee your order gets ...


9

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 on the books because they could be blindsided by adverse news and while their fill would be better than current price, it could end up being a poor fill (think ...


8

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 / Taker The person who posts a bid or ask on the exchange (who is potentially taking more risk) is given a reduction in transaction fee by the exchange for ...


8

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 throughout this time. Sometimes the price remains visible, as with after-hours and pre-market trading. Sometimes the price is not quoted but people's views on the stock ...


7

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 already made the trade. When someone agrees to your bid or ask, no one asks you if you still want to make the trade. You're obligated to make it. As such, you ...


6

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 order is filled and the security's price then drops like a rock. However, that's investment risk and it that has nothing to do with the level of quotes that you ...


6

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 after hours trading and if there is none, at the open of regular hours trading. If you place a limit order at X, you'll be filled at X if the security trades at ...


5

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 under the hood, after the CFTC-SEC joint advisory commission raised concerns about the use of market orders in the case of large HFT traders, and concerns on the ...


5

The price is moving higher so by the time you enter your order and press buy, a new buyer has already come in at that time and taken out the lowest ask price. So you end up chasing the market as the prices keep moving higher. The solution: if you really want to be sure that you buy it and don't want to keep chasing the market higher and higher, you should ...


5

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 if it's a market order you are being guaranteed (well, in a way) of getting the stock but u are not guaranteed of getting it at the ask price So it all ...


4

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 are looking for if I understand your desire correctly is a sell stop, that will only execute once a price falls to a certain amount. Good intro to order types/...


4

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 order), only 3482 shares of FRONU were traded (reference, screenshot). Your marketable limit order of 3000 shares is relatively large; it represents 85%+ of ...


4

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 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 ...


3

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 the last trade prices. This is information from the past. What is important to you now is how much others are willing to pay to buy your shares now. For this, ...


3

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 (slippage). Suppose you have backtested a strategy with trades at reported daily closing prices. As long as your orders are small compared to market volume, you ...


2

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 care how low the price is. For example, after a company goes broke, its stock continues to trade for a while. This allows shareholders to realize their ...


2

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 Smart Routing but I can't state that this is true across the board. Here's the information that they provide for traders: An odd lot is a number of shares less ...


2

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, taxation, etc. The rest of it makes for a good cocktail party discussion of what ifs. There are a number of variations but let's consider a simple three party ...


2

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 the market opens. In order to try to verify this, I looked at the fill prices of a couple of market orders I placed while the market was closed. I looked at two ...


2

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 the day to trade and the remaining hours should be ignored. You should buy and sell when your price is available not based on some predetermined list of ...


2

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 a bid/ask price at which you can transact. The specifics depend on your broker but as an example, I'm only able to specify limit price/limit yield when buying/...


1

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 heavy markets, where the price moves reasonably slowly, market makers will have resting orders in the depth ready to be front of the queue when the market does ...


1

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 see a new order come in. As you are very confident in the correct price of this asset, when you see an order come in at say, 51, you're more than happy to quickly ...


1

My guess for why "other orders" accounted for the majority of orders is that these are conditional orders such as stop loss, stop limit, AON, GTC, trailing stop, as well as some less frequent ones like fill-or-kill, bracket orders, market-on-close, limit-on-close, immediate-or-cancel, etc.


1

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 either for MSFT or MSF. In normal times, arbitrage will make sure that the price on both exchanges is basically the same


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