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> >> If someone else has more recent info ....
> >Peter: thats is correct, i had that happen with LU a while back on a
> >market order 10 minuates after the open. 45 minuates later i get filled,
> >this is an issue that averages 160million shares a day, first time it
> >has happened too, i shorted it alot untill then , now i use a limit
> >order, takes precedence over market orders, craig
> >
>
> Is the 'limit order takes precedence over market orders' a
> general market truism? While I don't have absolute data to prove
> so, it seems that my personal experience is otherwise. Then
> again, it could be that I didn't use a real-time quote.
>
This description varies from my understanding of the NYSE. I
image the market for a stock there as 2 queues; one for regular
orders and the other for short sales. In any situation the order
at the best price has precedence. If both queues have an order
at the best price then the regular order always has precedence.
If there are multiple orders in one queue then the oldest order
has precedence. By definition market orders are always at the best
price.
So limit orders will get you in ahead of market orders so long as
the market trades to your price sometime after you place the
order. They are newer orders than yours at that price. You will
be filled just as soon as the limit and stop orders placed at
that price before you placed your order are filled.
I'm not sure how the other exchanges work, but it seems to me
that the NASDAQ can not be the same since they have many market
makers with no central clearing???
A couple of things to note... First, individual brokers can
"cross" trades thereby skipping the process above. I have never
found this to be much of a problem, but I only short very active
stocks.
Second, if you have an open order and the market is trading within 1/8
of your price your broker can "status" your order and tell you how
many shares are ahead of you.
regards,
tbr
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