A good book (limit vs market)

Discussion in 'Order Execution' started by ProgrammerGuy, Aug 19, 2007.

  1. if that is your reasoning why to use limit orders may I kindly suggest to remove yourself from the thread.

    #11     Aug 19, 2007
  2. To exit a losing position i almost always use market orders, when a position is going against me, i wanna get the **** out at any price .. market is the way to go.. unless u have some fancy orders that will swipe ecns along the way.
    I have in the past used market to enter a position but thats only when i have a stuck quote on the offer, and my nx tries to grab that price and the market is 40 cents away and i NEVER limit to get into a position .. only to get out of my position i will limit.
    #12     Aug 20, 2007
  3. Yeah, no problem there chief.

    This from the guy who uttered the words below.

    Registered: Mar 2007
    Posts: 69

    08-18-07 01:55 AM

    i place all orders at market, so then I guess I'm taking liquity


    P.S. Please keep using market orders, I love getting stuffed with shares in the money.
    #13     Aug 20, 2007
  4. When you want to enter or exit in a relatively volatile market, a limit sell at the bid gives you most of the execution certainty of a market order, without the possibility of further slippage if the bid is suddenly pulled down a tick or two between the time you click and the time your market order hits the server (it happens often in markets like the DAX, crude oil, or natural gas). BTW, this explanation more or less assumes you're executing through a DOM window (depth of market -- i.e., the order book). Given the volatility of markets that you trade, you can judge the likelihood of that scenario for yourself. Perhaps it's not relevant to you.

    If the bid would plummet very quickly and your limit order is left sitting in the book, you again would have a pretty good chance of getting filled at that price since you would be at or near the front of the queue with the best offer. The market could also leave you hanging there, but hopefully not.

    When you really want out of a position, just use a market order. The extra tick or two of slippage is minimal compared to the market running wildly against you with your working limit order way out of play.

    I'm a short-term trader (usually in and out for a few ticks, sometimes more), and I use limit orders in the traditional sense about half the time (wait for them to come to you -- more often for entries), and in the manner I described above the other half (more often for exits). I'll use a market order once or twice a day when I feel like I just need to bail.

    I hope that's helpful.
    #14     Aug 20, 2007
  5. Wow, you really just proved to everyone that using limit is better.

    Nice job there champ
    #15     Aug 20, 2007
  6. If you don't use limit orders, you will never get price improvement from the specialist or market maker. If you're trading for a living, every cent counts. The .02-.10 cent price improvements can add up to thousands of dollars over a year's time.

    If you trade with market orders, you're not only leaving money on the table, but giving the market makers the right to take full advantage of your order to their advantage.
    #16     Aug 20, 2007
  7. You just dont get it do you? Maybe one day you'll learn how to use a limit order as a psuedo market order with some price certainty, but i doubt it.
    #17     Aug 20, 2007
  8. do you idiots not understand. PLEASE!!!!!!!!!! I KNOW YOU GET A PRICE IMPROVMENT FROM A LIMIT ORDER!!!!!!!!!!!!!!!!!!!!!!

    however none of your guys talking about not getting your limit orders filled and the price shoots strong in the direction you were trying to get filled.

    There are 2 swords here idiots!!!

    I'm trying to find out which side has the sharper edge.
    #18     Aug 20, 2007
  9. You just don't get it. I'll repeat what I wrote in the first post with a little more detail. If you want to get long and the stock is (bid) $21.45 x $21.46 (offer). Simply take a routed key (inet or arca) and bid $21.50 or $21.55. This will swipe all offers starting with the lowest offers until your order is filled.

    This acts as a psuedo market order with at least some price certainty. It's certainly better than sending a market order to the specialist and getting raped for 1/4 point isn't it?
    #19     Aug 20, 2007
  10. RedInk

    I completely take back everything I have said. I never knew that. Thank you very much for pointing that out. I'll have to look into that.

    I will full say now that I'm the idiot
    #20     Aug 20, 2007