Question about OPG orders

Hi, I have a question about placing a market on open order..sorry if this question had already been asked.

If I place a large trade, relative to the volume, to buy or sell on the open on a platform like Interactive Brokers am I protected from getting filled at an extremely high or low price .


I know that Interactive Brokers protects you from an unfair price compared to the National Best Bid and Offer but am unsure if this also applies to the opening auction.

Any insight would be greatly appreciated. Thank you.

 

I expect you will be subject to the open on the primary if set there, good or bad.

 

Got it but lets say I place a large order on the open, and there is very little volume will my order just not get filled or I would hit a bid/offer at a price that doesn't reflect the stock

For example, if the average volume on a $10 stock is 5,000 and I place an order to buy 100,000 shares MOO...is there anything to stop me from buying the stock at a ridiculous price such as $100 or would I just not get filled?

 

A market order for the open will be filled at the best price under the exchange rules. Yes, it can move the stock a lot if volume is very low and your order is very big. You should place a limit if you are concerned.

 

ok Thank you, do you know of any way to obtain the order book for the opening auction?

 

There's no protection for auctions. Same goes for limit orders. Auction orders just before the matching process cannot be cancelled so IB cannot do anything to "protect" you.

 

Sorry, but I'm reminded here of the old story that if you're at a poker table and you don't know who the sucker is...then it is likely to be you.

 

As others have said, just use limit orders and don't rely on others to protect you. Pretty simple.

However it is not true that there are no protections. IB will price cap OPGs (it's not documented how this works, but I've seen messages in my API logs about orders being capped) and exchanges also have some basic safeguards in place that reduce the chances of filling at insane prices. Nasdaq for example will not execute any shares further than 10% from the midpoint, so if your order is so massive that it would execute below that, you will get a partial fill or no fill. Look up the exchange specific documentation about how auctions work if you want all the details.

 

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