Basic LMT order question

K

kyamato

Hi, I know this is a basic question but hoping someone can help.

When You place LMT Buy order for say 100 shares I understand that it will appear on the book/ L2 on the Bid side


However when you are trying to short a stock (and dont own any shares). say you want to sell 100 LMT, does that mean the order appears on the ASK side?


Also as a follow up, how do people "hide" there LMT orders so it doesnt appear on the book. Lets say you want to unload a lot of shares but if You put in on the book the price wont go that low since everyone knows someone is trying to unload shares at the point. So what do traders do?
 
kyamato said:
Also as a follow up, how do people "hide" there LMT orders so it doesnt appear on the book. Lets say you want to unload a lot of shares but if You put in on the book the price wont go that low since everyone knows someone is trying to unload shares at the point. So what do traders do?
More...

There are two order types for this. A hidden order and an iceberg order. A hidden order would not show and an Iceberg order might show 100 shares when the order is for 250,000 shares.

https://www.lightspeed.com/active-trading-blog/what-are-iceberg-orders/

upload_2018-10-18_4-20-51.png
 
Yes they show in the order book as when you short, your borrowing the stock.

If your order is so large you worried, you could break it up into small chunks and scale out. The average lone trader in a liquid stock shouldn’t have to worry about putting too much out there.
 
There's two steps to shorting - borrowing and then selling, it will appear as a regular sell order.

You can set your order to be hidden but if you are doing bigger size, you should use a more advanced algo that splits the order up. There are many many ways of doing this.
 
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