Thanks Bob. Stupid question but what is the difference between the bid & ask and the primary bid and primary ask?
Not stupid. The bid ask looks at the best from all the exchanges and ecns in the data base. The primary is the exchange where they symbol is listed. Eg GE is NYSE and AAPL is NASDAQ.
So this links into a hot key question in LS I have. I've noticed that a user can either select his/her preferred ECN (i.e. ARCA, EDGX etc.) or Primary Market. In an attempt to answer this question myself, would I be right in saying that if routing fees are the priority then nominate your preferred ECN. If speed of execution is a priority, select Primary Market. Right?
For stop orders, I would use a custom order and ‘“STOP” in the routing choice. This will route your order to one of the EDGE markets where the order is held serverside vs on your PC. The choice of your trigger is a personal choice and does not effect speed. I would use Bid or ask. You should not make cost the main priority with a stop as a bad or no execution will have a higher cost. With other order types, I suggest using LSPT during regular trading hours for taking liquidity and NASDAQ before and after for taking and anytime for adding. I like NASDAQ better than ARCA because they have no extra re-routing fee, if your order needs to be sent to another ECN to be filled. If you have a sales person on your account with us, your should discuss this with them
You have to figure it out for each stock as each stock is different. Your risk on a trade would vary on the stock even assuming the same setup. Let us just say, you trade pullbacks. The risk of that trade being your entry price minus the stop loss price. Say your entry is $20.00 and your stop loss being at $18.00, so, your trade risk is $2.00. Your 2% of your $3,000.00 capital is $60.00 then, the number of shares you would buy is $60.00/$2.00 = 30 shares @$20.00. So that trade costs you $600.00 plus the cost of commission.