Does the broker make a difference when executing limit orders?

Discussion in 'Order Execution' started by ajensen, Dec 23, 2018.

  1. Taking this back to the original question on a much more superficial level, if the original poster is sending a limit order why does all the technical stuff that everyone is parsing through matter?

    Clearly a naive take on the original posters question but if the OP has determined they want to enter a position of 10,000 shares of equity X at a limit price of 10.00, going back to the original point, does the broker matter when executing limit orders? IF the order gets filled at 10.00 isn't the OP getting into the position they had planned the trade for?

    Is the question whether the order actually will get filled at 10.00? Ultimately the way I read the post is that as long as the order fills 10,000 shares at 10.00 the OP's limit order was executed.

    Again, a naive take on the original post and maybe my discretionary take on trading is very simpleton but ultimate it seems if you are placing limit orders a fill is a fill for the price you set the limit at. What am I missing on this?

    From my perspective of predominately options and futures trading, execution seems to be a much more significant issue with wider option spreads than on tight high liquidity equities.
    #21     Nov 23, 2019
  2. qlai


    Well, I will then ask the same question - why do spreads matter? You have decided to buy option for $10.00 and sell at $20.00. So place limit buy order at 10.00 and wait for the ask to come to you. Then you place limit sell order and let the bid come to you. Probably how most retail traders should be doing it anyway.
    #22     Nov 24, 2019
    murray t turtle likes this.
  3. With all do respect, your answer appears to verge a little on the condescending unless I'm interpreting your prose wrong. Spreads are irrelevant to the discussion because spreads are a function of market makers and their risk tolerance and what they already have on their books among other things.

    Of course, you cannot control the spread on the trader end but you can control your limit price whether that is a an attempt to split the bid/ask at the mid or to sit on the bid.

    From the original poster, it is unclear what type of trader they are but from my perspective, if you aren't trying to scalp pennies as a HFT the original posters question and my restating of it remains. If you get filled on a limit order at your limit price, does the execution of your broker matter as long as your order actually is executed?
    #23     Nov 24, 2019
  4. %% Sounds like the best way to do it.
    Most likely as hinted here, the stock/ETFs matters more, more multimillion volume @ day , the better.Fidelity has so much bs /fine print/extra charges, on ETFs, i cant comment on thier stock fees.[BUT i dont know if this still applies after most cut comissions to zero]........................................................................................................:cool::cool:,:cool::cool::cool::cool::cool:
    #24     Dec 11, 2019
  5. If you’re posting limit orders, you should use IB tiered commission schedule where you get rebates passed through from the exchanges that pay for limit orders that provide liquidity. This will reduce your commission and possibly even make it negative depending on which exchange and how much volume you trade.

    IB also offers a lot more exchange routing options, which could increase your chance of getting filled or getting filled sooner in some situations relative to the Fidelity choices.
    #25     Dec 21, 2019
    murray t turtle likes this.
  6. %%
    IN MANY cases it would not matter. But like IBKR notes; use 2 brokers; or could substitute a broker + a bank. May not want to use one of the bigger banks that leads in losing lawsuits+ fines/SEC fines+ stuff like that.................................................................................
    #26     Dec 23, 2019
  7. lbhere


    I really appreciate your sharing this information. I have been reading my eyes red trying to figure out where to run after TDA's recent confirmation problem with my account. I think I may have just found the best of what I need as an active trader....but not so active that I feel 100% comfortable making the commitment to pay commissions plus a trading platform fee every month.
    #27     Feb 8, 2020
    murray t turtle and comagnum like this.
  8. I understand pricisely your vision here, and I assent to your interpretation. However, one must consider that albeit laws mandate best bid/offer regulations and reporting, if your limit order is filled at 10.00 just miliseconds after the market has already moved because there was a delay (adding up; id est, your desk to the middle man or elsewhere and finally to execution), you potentially lost the opportunity in which you could have made a discretionary decision to cancel or make adjustments. Still with me? Now, this would also tie into varying data by so many feeds, yet again, this order being routed off and sold separately means that it doesn't get displayed. Add this order not being displayed along with heaps more, and now I might even venture off to say that somewhere this data is now capable of easier manipulation. (Not theorising conspiracies, watch the congressional hearing in the video posted to this thread. Everyone wants to know the order flow, get the rebates, etcetera. 'Exchange fined 14M'.) The dreadful news is that the big guys get fined, but the owner of that bad order (bad because in time and position) might have lost a lot and never been reimbursed those innocent losses. Just something to be aware of I suppose.

    Even if what I've written is not in consonance with the original poster's intent, I'm keen to understand things from the inside out and so this is my contribution to answer your particular question (and that of others like myself), "why does all the technical stuff...matter?". I'm still searching for the best way to overcome these obstacles I've mentioned, myself. Perhaps it's less important as the trading time-frame increases or type and style of trading. Interesting topic... Best, :thumbsup:
    Last edited: Mar 6, 2020
    #28     Mar 6, 2020
    lbhere and murray t turtle like this.
  9. qaz


    If stop loss orders are essential to your trading routine then you do not want to use brokers that accepts payment for order flow. This is the biggest downside in addition to speed of execution and almost non-existent price improvements.
    #29     Mar 6, 2020