Which limit orders participate in the closing auction?

Discussion in 'Order Execution' started by ajensen, May 18, 2020.

  1. ajensen

    ajensen

    The retail platforms of Fidelity, Schwab, and Merrill Edge do not offer limit-on-close (LOC) orders (I just tried), but IB does offer LOC orders. Suppose an illiquid stock is trading at 10.00 - 10.20. If I place a limit order to buy at 10.10 at 3:58 PM that expires at the end of the day, does that order participate in the closing auction unless someone hits my bid at 10.10 before the close? In general, I am wondering if the ability to place LOC orders is important or if I can get close enough with limit orders placed near the close.
     
  2. trend2009

    trend2009

    Only if imbalance exists
     
    d08 likes this.
  3. Are you sure Fidelity and Schwab do no offer LOC? When I asked them, they did offer MOC.
     
  4. ajensen

    ajensen

    Fidelity allows only market-on-close, giving an error message "A Time in Force of On the Close is only eligible for Market orders" if you try to place an LOC order.
     
  5. Remove the gtc to get rid of that error
     
  6. ajensen

    ajensen

    So, to be specific, I could place a limit buy order at 10.10 at 3:58 PM and not be filled even though the price in the closing auction is 10.09? In order to be sure my limit order participates in the closing auction it has to be sent by 3:50 PM?