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Peter2150@xxxxxxx wrote:
>
> In a message dated 97-11-09 00:40:03 EST, eric3@xxxxxxxxxxx writes:
>
> > Hate to say it, and even though you think it doesn't make sense, this is
> > all correct. The broker is kind of telling half a story, but the rest
> > is true. There are no stops and no market orders allowed on Globex.
> > Some brokers are accepting stops (which is a market order in the end)
> > that they watch themselves and brokers are saying they take market
> > orders, but they are not true market orders.
> > Market orders on Globex are really 4 tick (1 point) limit orders so yes,
> > you can be unable on an order you place as a "market" order. Not even
> > all brokers are fully aware of this but if you are trading in these
> > volatile times, you should be aware of it.
> > This is one of the current limitations of electronic trading. It is
> > there as a protection for the customer so you don't pay way up
> > unintentionally when the market is thin.
> >
>
> Okay Eric. I think I understand what you are saying. Let me ask you a
> question. I am long 1 contract and I tell the broker to sell 1 at say 915
> stop. It goes thru and thus has to become a limit order. Say price is now
> 914.00. Exactly what would the order be. Buy one at 913 or better. In
> another words what price does the broker now use for that limit.
>
> Pete
Best to ask your broker since I don't know the exact logistics of the
order entry but here is my guess.
First, the stop order is not entered into the terminal. Some clerk is
watching the screen for your stop price to trade before he can enter
it. When he sees 915 trade, he enters a sell limit order at 914 (4
ticks lower than your price). If there is a bid higher than 914 on the
screen, you are filled at that price. If not, then you are unable and
the order stays in the system as a sell at 914 and you hope the market
comes back up.
Crazy but true. Get a good explanation from your broker because there
is possibly leeway in how they handle these things.
Eric
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