Methodology of order filled (John vs Mary)

Discussion in 'Risk Management' started by maggie_swan, Nov 13, 2011.

  1. I would like to request for the methodology of order filled.

    For example, ES (Futures of S&P 500) current price is 1234.
    John places five (long) limit orders at 1200 at 1:30pm.
    Mary places one (long) limit order at 1200 at 1:35pm.

    Suppose ES goes down, "touches" 1200 and goes up again.
    (1) Will John's five order be filled first because he placed order earlier than Mary?
    (2) Does the filling methodology depend on TIME (assume SAME price) only?
    (3) Does it also depend on QUANTITY? Or any other factors?

    Thanks a lot.
  2. Neither gets filled.

    Because their brokers do not fill their orders unless the price dips below 1200. This is the precondition for a broker to frontrun (internalize) the clients' orders: profit.

    In other words, if the price doesn't dip below 1200, there is no profit to make, and the brokers won't fill the orders.
  3. Tell that to some scalpers here. I guess if you have direct access you can do that. But a retail broker will not fill the orders, you are right.
  4. Dear Beachhouse,
    Which broker are you using?
    Mine can fill the order sometimes.
    Assume the brokers do NOT cheat, which is mechanism of CMEGlobal?

  5. I'm a small individual investor. Can I direct access to the market?

  6. All brokers cheat to a certain extent.

    Brokers are like doctors, and their clients are like patients. After a doctor gets a new patient, the doctor treats the patient as a cow from which milk can be squeezed out regularly (is that too graphic?). For example, you, as a patient, have arthritis, and go to see a doctor. The doctor will start the milking process: registration fee, checking fee, X-ray fee, analysis fee, re-visit fee, prescription drug fee (by the way, it's a matter of commission between a doctor and a pharmaceutical company, such as Bextra or Vioxx manufacturer paying a doctor to promote the drug to patients. ok, I digressed), physical therapy fee, more physical therapy even though it is against sound medical principles of not aggravating a body part when it is torn or injured, etc. Of course, if you have insurance, the milking process will last a very long time.

    Same is true with a broker. One a retail trader/investor walks into a broker's office, the milking process begins: money deposit, delay of deposit to make money on the several days' investing your money before it is credited into an account, maintenance fee, data fee, market news fee, commission, frontrunning, internalizing, order selling fee, routing fee (exchanges are desperate for trading volume, exchanges are businesses too, right? They need customers to trade on their systems, just like a shopping mall developer who wants Macy's, Dillard's, JCPenny and Nieman Marcus to open stores in his mall).

    If some broker like Corzine decides to steal your money, you are unlucky.

    My suggestion is to use a broker that is not as bad as others. In other words, choose the lesser evil.
  7. Beachhouse,
    Thanks for your reply. I learnt some evil things from the brokers.
  8. I am not as knowledgeable as others about brokers. Some know much more about them:

    You may also take a look at the ratings of brokers on ET. Some users told you about their experiences with those brokers.
    Be skeptical when you read the ratings, because some "posters" are actually employees of those brokers and they gave really high ratings to mislead innocent traders. You can't blame them. If you look at the advertisement of General Motors, it won't say: Chevy is a lousy car, don't buy it. Instead, the ad would say: Chevy is the most innovative car of the year!
  9. rosy2