Tough luck or was an order triggered when it should not have been?

Discussion in 'Order Execution' started by tradermac, Apr 14, 2009.

  1. tradermac


    Looking for any clarification, please.

    Was short CASY at 27 yesterday. Put a buy-stop in at 27.68 gtc after I got filled short. I check this morning for an update and see that my stop-loss was filled at 27.46, the HOD - so far.

    I know the bid/ask spreads get a little wide pre-market but should I have been filled here when the stock never traded up to my buy-stop, 27.68. My broker said once my ask was hit, my order became a mkt order; thus, I was filled at 27.46. I must be missing something here 'cause this does not make much sense to me.
  2. I've had this issue in the past with LightSpeed and a couple other software platforms. Who is your broker/software platform?

    Anyway, what happens is certain software platforms do not filter ticks, so, in the case of Lightspeed, level 3 prints, or, on occasion, erroneous prints would trigger stop orders. The way around this to either filter ticks or use the Bid/Ask or some combo of Bid/Ask to trigger stops.

    Also, a market order in an illiquid issue (especially on the open) will always get filled away from your stop price, sometimes in your favor, sometimes not. I've found its about 50/50.
  3. tradermac


    Broker is Thinkorswim; was at work and used their browser based platform (if it matters).

    The lower fill was in "my favor" but I'm not happy that I got filled when the stock never traded to my exit price in the first place.

    So, do I have a gripe or is this the way it is?
  4. piezoe


    TOS keeps your stop order on their server until some event transpires and then they transmit it as a market order. From what your broker said I would guess that the trigger event is either the ask or last being at or above your buy stop price. But that event would just trigger your order being transmitted as a market order, so it would not guarantee a fill at your stop price. You could get filled either at, above, or below your stop price. Apparently in your case Last never reached your stop loss price, but your stop order got triggered, so i am guessing that one of the triggers used by TOS is when the Ask is equal to or greater than the buy stop price. That would be consistent with what your broker told you. Why not call them and ask them specifically what condition or conditions can cause a stop order to be transmitted from their server?
  5. With TOS you can choose which of those conditions triggers your stop order. You probably left it on LAST and not BID/ASK, or the webbased interface might not have those options.
  6. niteowl8


    I think the others are on the right track regarding how the TOS completed your order. You can always put in a complaint and see what happens. Hopefully, they will offer some compensation.

    Note to self -- always use stop limit orders.....
  7. tradermac


    Dead on, piezoe. This is exactly what the broker said. And, he recommended what Darkhand mentioned (using bid/ask function) if I wanted to avoid something like this again in the future.

    Thanks for the feedback, fellas.