How are Limit Orders Handled at the Open?

[KAWill70]

I had a Good Until Canceled Limit order pending for several weeks at my brokerage. The security was a Closed End Municipal Bond fund with an average daily volume of 50,000 shares.

The GTC order was to sell 400 shares at $10.00 or higher.

The security closed the previous day at $9.97 and then opened the next trading day at $10.27. It traded as high as $10.41 before dropping to $10.00 and then traded up a few cents. It closed at $10.00 at the end of the day.

I was executed after the open at my Limit Order of $10.00. However, since the stock opened at $10.27 and then traded as high as $10.41, did I get a fair execution?

What are the rules for something like this? The spike to $10.41 seemed unusual. The trading day was one day ahead of the Ex-Dividend day.

Thanks, KAWill70

 

[risktaker]

You had a limit order to sell at 10 or better. Price touched 10. Your order was executed at 10.
Your broker did as you instructed. It's not their job to "do it better".

You're grumpy that price went higher after you exited. It's not the broker's fault.

Move on to next trade.

 

[Spike Trader]

Brokers often carry out trades for clients from their own account.Its possible that he bought you out at 10 , sold at 10.27 and pocketed the diff. Happens all the time

 

[spd]

Quote from risktaker:

You had a limit order to sell at 10 or better. Price touched 10. Your order was executed at 10.
Your broker did as you instructed. It's not their job to "do it better".

You're grumpy that price went higher after you exited. It's not the broker's fault.

Move on to next trade.

That was a pretty snotty answer. He didnt really come across grumpy at all in his question. For fucks sake.

 

[5yrtrader]

You are owed the opening print no question, unless your order was executed before the open in the after hours session. You shouldn't move on, you should figure out why you where filled at 10.00

5yr

 

[KAWill70]

Quote from risktaker:

You had a limit order to sell at 10 or better. Price touched 10. Your order was executed at 10.
Your broker did as you instructed. It's not their job to "do it better".

Thanks for the reply.

I was happy to get $10.00 but just wanted to understand how these things work for future reference. This was only an experiment investing in a Closed End Bond fund for the first time. I held it since 2008.

The fact that the security opened at $10.27 seems the key. Maybe part of the understanding of this situation is how various orders from different brokerages are queued and where the market maker is located. Volume of various orders could be another part of the explanation.

Thanks also to Spiker, and I suspected that these kinds of things happen all the time.

The fellow who paid $10.41 must not be very happy. Volume did not look very high so it makes little sense that this closed end bond fund spiked that high. I think people wanted in ahead of Ex-Dividend.

 

[KAWill70]

Quote from 5yrtrader:

You are owed the opening print no question, unless your order was executed before the open in the after hours session. You shouldn't move on, you should figure out why you where filled at 10.00

5yr

Thanks for the note on the opening print.

I should probably ask my brokerage about it. The dollars are small but something just doesn't look right here.

One also wonders if my order was queued up and with a market maker at the instant the market opened. Maybe my brokerage sent my order a few seconds after the open.

The order was not "All or None" so it should have been reflected in the market.

KAWill70

 

[risktaker]

Sorry, disregard my previous comments. I didn't pay attention to the fact you mentioned the prior day's close of $9.97.

5yrtrader is right.

 

[KAWill70]

I was simply selling a Closed End Bond fund with a GTC order at $10.00. Order had been submitted weeks before and was waiting for the price to rise to $10.00 or higher.

On Wednesday the security opened at $10.27.

KAWill70

 

[The Big D]

Quote from 5yrtrader:

You are owed the opening print no question, unless your order was executed before the open in the after hours session. You shouldn't move on, you should figure out why you where filled at 10.00

5yr

Agreed - assuming it's a GTC limit order at $10, regular hours only, and the market opened above $10, he should have gotten exactly the opening print.

If it wasn't regular hours only, you may have been filled in premarket, and then $10 may be the correct price. That doesn't seem likely however since the OP states he was executed "after open" - perhaps he means on open. In either case, $10 is not correct.