I've traded nas stocks for a long time, but really only started trading listed stocks recently. I've heard that small limit orders are a nuisance to specialists and they will often fill a limit order a few cents outside the market just to avoid "messing with it". If this is the case, why couldn't you buy just below the bid and sell just above the ask once you found a specialist that didn't have the patience to let limit orders sit? Swish
"I've heard that small limit orders are a nuisance to specialists and they will often fill a limit order a few cents outside the market just to avoid "messing with it"." i doubt this is true.they arent in the business of giving gifts. the only reason they fill you at the bid or less or ask or greater is because the nyse rules say that all retail orders must be filled before they thay can fill their own.
how can a specialist fill a limit order "outside the market" . besides its all electronic......believe me...the specialist could give a rat's ass about your order!
i just started and acct with IB to trade futures and made a couple of trades today and was able to buy on the bid and sell on the ask, the maket wasn't moving against me on any of the trades. i haven't tried it for stocks though.
So, let's say you put in a limit sell at 1010.25 when the bid/ask was 00-25... when you got filled, the market was no longer 00-25, but rather had moved to 25-50... and you got sold at the THEN market bid of 25, dosho?
Not necessarily. You will then get added to the offer. It doesn't have to trade through to the next level for you to get filled. Eg, say there are 500 contracts on the ask. you join the ask as 501. After you join the ask someone else with 250 contracts joins the ask also, making the total ask size 751. If 600 contracts are then traded at the ask you will be filled before it goes up a level.
You must be trading NSM. I used to doubt people bashing specialists on here until I tried a few trades in NSM.
that hasn't happen yet, but i've had it happen in the past i just started trading w/IB today, and i put a sell at the ask and have been filled and the market stayed the same at what i sold at for some time later, it didn't move up or down. i've done the same on the bid. so far i've been filled on buys at the bid and sells at the ask everytime, i know that won't happen everytime, when the market moves to quick against me, but their software and systems seem to be pretty good so far, i'm also only trading one contract to start.