Thin market order game newbie questions

Discussion in 'Order Execution' started by privador81, Sep 11, 2008.

  1. Im quite newbie at trading.

    So i experienced on example

    We had Stock XYZ,closing prize was 10$
    There was some news,and i tryd to get some stocks in premarket.
    bid/ask at that moment were 10.26/11.00
    Actually my highest bid would have been apr. 10.4$

    So i wanted to dominate bid and entered 10.27 order
    Suddenly it was 10.28
    So i continued with 10.29,and there was respone 10.30
    I did 10.40 and there was again 10.41

    I gave up and entered my order again 10.26.There was some time delay and 10.41 order was changed to 10.27!WTF

    Or second example

    I manage to make "winner"bid @10.27
    And my bid didnt changed until there was trade @10.30!(I would have bid 10.40!)

    So whats happened?My friend told me that without "hidden order feature " i cannot beat that order game?

    But is it true that only IB provides hidden orders?
    I trade a lot in premarket and executions are very important

    Thx for any help
  2. A computer program wanted to be on the inside bid up to a certain price. If you want to sit on the inside bid that computer program will jump ahead of you until you bid too high that the program doesn't want the fill. How do you game that program? Be creative with how you post and cancel and see what happens.
  3. It's called 'pegging' . It's an automation tool to stay best inside bid/offer. There are many different types, most alot smarter these days than they used to be when u could game them. Using a hidden order will overcome the peg because it can't 'shadow' you or 'leap' you if it cannot see you. Of course the obvious problem with the hidden order is no one else can see you either and when the spread is big it is a shot in the dark that someone will cross down and hit you. As well remember, you are not the only guy who may be hidden and so someone could be farther inside than your post anyways.

    And NO, IB is not the only firm that offers hidden orders, any real trading platform has this functionality. The one caveat is that not all ECN's support completely hidden orders ie ARCA.
  4. Thx for replay,but is there any list which brokers enable hidden orders?
    My broker is TOS.And it was said to me,that TOS doesnt have "hidden order" feature..