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If you do place a buy limit above the market in the pit, be sure to also
include "or better" so as to alert the broker that the order is indeed a
limit and not a stop and that you realize what you've done.
Regards, Jack.
----- Original Message -----
From: "TaoOfDow" <TaoOfDow@xxxxxxxxxxxxxx>
To: "Andrew Nopper" <tradera@xxxxxxxxxx>
Cc: <omega-list@xxxxxxxxxx>
Sent: Monday, June 03, 2002 10:32 AM
Subject: Re: Bad ticks caused by Wrong Orders
> Dear Group,
>
> I may be wrong, and if right, this may be arcania, but I believe there has
been
> and may be use for a buy-limit order above, at least slightly above, the
market
> with pit (not electronic) trading. Pit orders are executed by humans, and
as it
> was explained to me by an old retail S&P pit-trader, they are only human
and
> like to be "better than average" and "go the extra mile." Filling a
buy-limit
> order a tick or two below the limit price allows them to show themselves,
their
> firm, and the customer that they possess those qualities. Through their
phone
> clerks, they get to tell their customer "Filled at [a tick or two] below
your
> limit" --- what a deal --- everybody's happy. That challenge and
opportunity
> does not present itself in the filling of a market order, there being
little way
> to provide objective evidence as to the floor trader's skill in filling
such an
> order.
>
> Another practical reason for using a buy limit order slightly above the
market
> in pit trading is simply to guard against the possiblity that in the
duration
> after phoning in one's order and before the order is executed in the pit,
> strange things don't happen, eg, rumor begins that MSFT has been
vindicated in
> its lawsuits.
>
> Limit orders have the potential to provide more opportunity at less risk
than do
> market orders --- perhaps not always, but on occasion.
>
> Sincerely,
>
> Richard
>
>
> Andrew Nopper wrote:
>
> > I think that the two of you may be talking at cross purposes. Hans is
right
> > that a buy limit placed above the market is "bullshit". It will work
without
> > a doubt, but then it's a market order in reality, and anyone in their
right
> > mind wouldn't go through the extra steps involved in placing a limit
rather
> > than a market order. However, as Jeff pointed out, this IS what happens
to a
> > market order when it gets into Globex. As Globex does not natively
handle
> > market orders, the market order to buy is converted to a limit order at
> > (generally) 10 handles above the market, thus ensuring an immediate fill
> > even in fast markets.
> >
> > Seems like everyone is right. :)
> >
> > Andrew
> >
> > ----- Original Message -----
> > From: hans esser
> > To: omega-list@xxxxxxxxxx
> > Sent: Monday, June 03, 2002 11:23 AM
> > Subject: Re: Bad ticks caused by Wrong Orders
> >
> > > Jeff,
> > >
> > > thanks for fedback.
> > >
> > > I talked to my broker and he assured me that a buy limit order placed
> > above the
> > > market on Globex will be executed right away.
> >
> > OFCOURSE it will - because the order is bullshit
> >
> > What you plan to do above the market is a BUY_STOP order and nothing
else
> >
> > rgds hans
>
>
>
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