Anyone use market orders?

Discussion in 'Trading' started by interdigital, Dec 10, 2007.

  1. I've been using market orders exclusively in my trading. I like to trade large numbers of shares, and I know it would be a bad idea to use market orders for thinly traded stocks. So I've just been using market orders for stocks with massive volume (for example, I've been trading CFC 8000 shares at a time). I want to be sure that when I enter or exit a position, that I get executed completely. A market order guarantees that.

    So what do you guys think of that? Any drawbacks that I'm missing?
  2. I use stop orders a lot. Drawback is sometimes there is slippage, but in futures it is not adverse.
  3. open


    well what do you know

    I too use market orders, why do I do it

    well I like to be unpredictable to ALL OF YOU OUT there hunting for my orders :D
  4. Use market on very liquid stock like QQQQ. Use limit and take the bid/ask on thinly traded stocks if you must get filled. That way you won't get raped by MM.
  5. We use market order 90% of the time. Just check your level 2 and if spread is within .01-.02, market orders are fine. Otherwise use Limit.

    Happy Trading!
  6. cashonly

    cashonly Bright Trading, LLC

    For liquid stocks with penny spreads, during market hours, market orders are definitely a reasonable strategy if you want to get in right now. Before RegNMS, you could often get screwed with a market order, but I've had great success with them since RegNMS came along.

    It also depends on your type of trading. If you're looking to swing trade or get in and hold all day long, eating the spread may not be an issue. However, if you're an active trader in and out of a stock all day long, those pennies can add up and you might want to consider sitting on the bid/ask. There are 2 benefits to this... one is you don't eat the spread and the other is that you don't have the taking liquidity fees and can often get the providing liquidity credits.

    If you're looking to make 20c, 50c, multi-dollars on a trade, then it's not a big deal, but if you're scalping for pennies it's a real big deal. I'd recommend scalpers try it both ways. Sit on the bid/ask and see if you get filled as often as you want (and they are good fills... ie: you didn't just get filled cause it's ready to immediately turn against you).

  7. Why does it seem like my market order frequently causes a reversal?
  8. cashonly

    cashonly Bright Trading, LLC

    I don't know, but next time you send one, let me know... I love a good contra indicator! :D
  9. Rarely use market orders.

    I use limit orders 99% of the time and haven't had any problems.

    Nothing wrong with using market orders on highly liquid stocks though....
  10. Klamath


    I use marketable limit orders a lot.
    #10     Dec 12, 2007