I have a question for all the listed stock traders here. Do most of you find that you get the best fills when using market as opposed to limit orders? What type of execution system do you use for placing listed trades and what are the fees like? Does it go through a system like ISI or a direct connection to DOT?? Leland
I virtually always use market orders. Limits are often tough to get off with the specialist. If limits were as easy and fast as they are on ISLD, I'd use them more. I rarely get a fill that is much worse than indicated by the current bid/ask at the time I enter the order
It depends on the specialist, the size i'm trading, and the volatility of the issue, but about 80% market, 15% limit and 5% island.
I always do limit, but I specify a limit 10-20 cents higher than the offer if I want to get a fill no matter what. This way I limit my slippage. I play the open extensively and getting a bad fill at a top print can be fatal.
It depends on how I am trading, -which type of style I am doing and so forth. If I need in a stock now I use market. I am guaranteed a fill in 2 minutes max. Usually the move I want in will last for 10 minutes or more so I don't mind giving up 2 minutes. When I am peeling out of a position I am in I use limit orders and get better fills. If I need to dump my entire position due to the market moving heavily away from current prices that I will use market. The fills depend on specialist some will screw you while others are really nice and give you a fill between bid/ask rtharp
I use a lot of market order in my trading too. I have had pretty good luck with my fills using market orders under the specialist sytem...
I usually use what's commonly referred to as a "marketable limit order". Basically if you're buying you bid over the offer and conversely if you're selling you offer below the bid. Typically 10-30¢ should do it. It helps you control slippage as others have mentioned but almost always allows you to get filled.
sallyboy, I used to do that too but I have found that I often get filled on a at a better price using a regular market order. If you enter a limit order at .20 over the offer and I enter a market order at the same time guess who's order gets filled first??? I'm just using this as an illustration and am by no means trying to make your method look bad!!!!
That is my experience as well. One more note: have a look at T&S to see how the specialist operates. Some specialists seems to prefer fewer larger trades on T&S while other let lots of smaller trades through.
What about shorting listed stocks? Assuming you don't have access to bullets. Do most of you use market orders for that as well? Leland