Home Forums Members Forum Buying and Selling at Market price

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  • Gregory Funderburk
    Participant
    Post count: 34

    Sean,

    Are all buy at market or sell at market orders basically instant. Aside from NOK (due to the crazy spike at that moment) all of my buy and sell orders were instant. Is there a dollar amount where they do not become instant. What I mean is if I put in a buy order or sell order on TD Ameritrade for $10,000 or for $100,000 or even $200,000 or more will they all still fill basically instantly. Is there a $ amount where this changes or approximate $ amount where it changes?

    Thank you

    Greg

    James Miles
    Participant
    Post count: 83

    Market Orders give you the next available price whatever that maybe. In a normal market the trades are processed very quickly so it feels almost instant. If you place a market order when the market is closed, it isn’t “instant” but you will get the next available price when the market opens (at your place in line.)

    In “fast markets” like what occurred with NOK, especially when they halt the trading, a market order can take a while to fill even though you still get the next available price.

    Aaron
    Participant
    Post count: 44

    They will be fairly instantaneous as long as there are enough open “buy” orders to fulfill your trade. So technically there will come a point that if your buy/sell request is larger than the currently available shares then it will not be instantaneous. This could be where the “all or none” check box comes into play depending on the circumstances. So, for most of the things we trade with, I’d imagine unless you’re managing a large investment fund you won’t have to worry too much about this.

    Aaron
    Participant
    Post count: 44

    That’s a good point James… trading halts can really muck up the process of fulfilling an order.

    Gregory Funderburk
    Participant
    Post count: 34

    Thank you for your responses.

    I am not trading a large investment funds but have been adding to each of my positions with LI. Just wondering if the sell or buy will be a problem if I start doing $50,000 or $100,000 buy or sell at market. Are these numbers still small enough that they will go through instantly. I understand this is an open question with each scenario being different. I am not in a position to do 1mil trades but surely there comes a point when trades are not so easily filled. Is there any problems with $50k or $100k?

    Thank you

    Sean Hyman
    Keymaster
    Post count: 7046

    James said it best.

    I wouldn’t suggest putting “all or none” orders in.

    The market order would still fill quickly on huge orders. The larger the order, it might take a second or two to fill, but they’re usually quick in the huge volume that comes with the type of companies we buy/sell.

    As a regular person, you’re not likely to get up to a point where you see fills delayed, on your market orders. But if you did, it wouldn’t be long. An extra second or two, etc., typically.

    So, at every price, there’s not an unlimited number of shares available. So if they fill all of the shares that they have at that price, it goes to the next price that they have shares available and it still fills those shares at that price.

    Market orders don’t specify price. They just say “buy now” or “sell now”. So, with market orders there’s a guarantee of fill but not always at the last quoted price you saw. Limit orders don’t promise a fill but if they do fill, they promise it will be at your price (or better).

    The problem with very large orders (a million dollars at a time, etc.) would be that you might move the market against yourself and have the latter part of your order fill at much higher prices due to your earlier shares that pushed them up. This is the problem institutions have and why they have to ease in and ease out of positions.

    But if you get to putting in a million per tranche and have 3 tranches per stock and 20-25 stocks, I think you’ll be ok. ha-ha. Most people will never have to worry about this.

    So, in short…it’s institutions that have to worry about the quality of their fills, on stocks like we invest in, not regular individuals.

    James Miles
    Participant
    Post count: 83

    If you are trading $50k – $100k per order then YES that will impact the speed of the fill. It really ALL depends on the stock. If it is a very high liquid stock it will be fairly quick but you will probably end up getting multiple fills at multiple prices.

    It would be a concern on etfs like FXY or stocks like E because they don’t trade very many shares in a day.

    E for example trades less than 5000 shares per 5 minute bar and so if you bought $100k at $20/share it might take several minutes to get filled.

    FXY trades less than 100k a day and so a 100k trade in FXY could take a bit to fill but what would be worse would be if you put a market order in for $100k in FXY it will fill you as quick as it can and it may push the price up.

    Sean Hyman
    Keymaster
    Post count: 7046

    Yep, James is correct.

    And if you want to fill a big order but not go above a certain price, you can set a limit order above the current market and it would only fill up to that price but no higher. Any shares that filled would be at that price or better.

    Gregory Funderburk
    Participant
    Post count: 34

    Thank you everyone for the responses.

    No I can’t do million tranches, lol, i wish I could. But I have been concerned if I start doing $50k or $100k tranches. The concern being what several of you have pointed out, that it may not all fill at the same price. But I would hope that the spread in price would not be multiple percentage points.

    Sean Hyman
    Keymaster
    Post count: 7046

    In a normal market, it would fill within 1-5 pennies, more than likely.

    While that’s “big money” to you and I…it’s not big money in a very liquid stock. For instance, IBM trades like 6 million-10 million shares per day at around $120ish per share. So, that’s a ton of money that changes hands each day in IBM.

    But James is right that FXY and E would trade less than that. Liquid, yet much less liquid. Doesn’t matter for the sizes we trade in, but it would matter on the institutional level, investing billions of dollars.

    There’s not concerns on an individual level, mainly at the institutional level.

    As a broker, I deal with some $20 million and $100 million accounts (rarely) and there were no problems getting in and building positions, etc. So I wouldn’t give much thought to fills, at our levels.

    Gregory Funderburk
    Participant
    Post count: 34

    Thank you Sean,

    Your last explanation and the explanations from the others has really helped me and set my mind at ease. I didn’t think there would be a problem but you and James clarified an area that I should maybe look at if I am concerned and that is the trading volume. I didn’t think IBM or XOM or some of our other positions would be a problem but I was not sure about all the positions. Thank you again everyone. These forums and the help that everyone gives and the leadership that Sean provides has helped tremendously. I used to keep everything just sitting idle in different banks, I knew that was a waste but didn’t like the idea of working with fast talking brokers. When i saw adds about investing biblically and recognized you from TV and did some research about you I felt very comfortable and am now enjoying following the market (most of the day now) and reading these forums. I don’t need to follow the market with Sean doing all the work but I was online ready to hit the sell in a second when the sell order from Sean came down on Nokia, that was wild.

    Thanks again everyone and especially thank you Sean.

    Sean Hyman
    Keymaster
    Post count: 7046

    Thanks, Gregory. I sure do appreciate it.

    Yeah, NOK will be one we always remember. Ha-ha. Makes for a great story to tell, for sure. ha-ha.

    Sean Hyman
    Keymaster
    Post count: 7046

    Its debt far exceeds its market cap and its cash is too low. And its only been publicly traded for a year. So, it wouldn’t make the cut for us when there are so much more sound stocks to invest in out there. https://finance.yahoo.com/quote/UWMC/key-statistics?p=UWMC

    Aaron
    Participant
    Post count: 44

    Ha, yeah… NOK was fun. In particular because I’m overseeing a project at BOA/Merrill Lynch atm. Makes me feel like I have something i can actually talk about with those, banker folks.

    kenatech
    Participant
    Post count: 173

    Years ago when I was trading shares of small companies in very thin markets, a market order could be filled over a pretty wide price range, but it would still fill quickly. With LI stocks, in most cases, except with unusually light volume, an order of the size most of us would use is not likely to move the price very much. Sean is right, NOK is very much the exception.

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