Please explain what happened...

Discussion in 'Trading' started by Option Trader, Sep 11, 2008.

  1. DRL was sitting with an ask of $14.04 for a long time. Someone came along and placed a bid for 700 shares at $14.03, then someone else for 1,000 shares. After a few moments I placed an order to buy shares at the ask price of $14.04. After a pause for a couple seconds on Thinkorswim, suddenly the $14.04 disappeared and ran away from me. My order was not filled, and instead I became the best bid at $14.04. The stock then proceeded to go up.

    Please describe clearly what you believe happened.
  2. Did you place the order on the same exchange in which the offer was sitting? If not, maybe by the time it was re-routed, the offer walked.

    Note: I trade futs not stocks so I can't say for sure but you would think that you should have gotten your shares almost immediately.
  3. NoDoji


    I've found that quite often when you place your price at the ask, the ask immediately goes up. I always place my limit either just above the bid or under the ask. And if you really, really want into the trade, buy at market.

    I believe market makers sometimes entice people to chase a stock this way.
  4. eagle


    Since this stock had a very low volume, it is quite possible that the $14.04 sell order may has been cancelled then. The time between the cancel order and your order was very short, almost simultaneously.

    Personally, I stay away from stock with very low daily volume, possibility of manipulation.
  5. Bushido


    The person offering at 14.04 could have cancelled.

    It could have been a post-only order.

    There could have been a delay in order entry at either end that resulted in someone else purchasing the shares.

    The important question is did any transaction take place at 14.04 at all if not it will be one of the first two reasons.
  6. eagle


    As you can see in this example that happened accidentally which is coincident to your trade. Bushido and I, we had the same idea about "cancel order" and bingo our response was instantaneous, our posts were submitted simultaneously.
  7. Quite clear to me that the $14.04 offer was not taken out by anyone else, and was not cancelled just at the same moment. I was watching level 2 closely, and there was a sudden major shift in the bid/ask that happened in the wake of my order.
  8. dsq


    that stuff happens all the time with lo vol stocks ...i wouldnt place a market order on lo vol stocks-thats begging to be raped...
  9. Placed order to buy at ask, not a market order.

    Stock was about to make a movement forward--not against me, but in the same direction.