Limit Order for pit-traded contracts

M

mikenv32

Sell limit orders must be placed above the market price in order to be accepted. Does this mean that sell limit orders placed before the market opens must be placed above the previous day's close, or above the current day's open?

Eg, current day's opening price is significantly below previous day's close. A sell limit order is placed a few minutes before market open at a limit price that is below the previous day's close, but well above the subsequent opening price.

Contracts are pit traded, not electronic.

Is this order unacceptable because the limit is below previous close?

Thank you.
 
Quote from mikenv32:
Sell limit orders must be placed above the market price in order to be accepted.

I've never heard of this policy, though I don't trade pits. If you price it above the last sale or offer, you are waiting for the market to come up to you. If you place it at or below the last sale or bid, you want to get filled, and want to make sure the market doesn't tick away from you, without allowing them to gap it hard, as might happen with a market order.

It seems as though they want you to give them market orders instead of marketable limits, and let them fill you wherever they want. Sounds flaky. Who is this broker?
 
What alanm posted is true. Keep in mind that during a "fast market" condition, brokers are "not held" to limit orders even if the market trades through the limit price.
 
Thank you for your replies. The trade desk refused to clarify the issue - in fact the individual on the trade desk reponsible for rejecting the order refused to speak to me at all.

I have closed the account as a result.

The broker was Man Financial.
 
Wow! You did the right thing. Whenever your brokerage firm "sticks up" for the floor broker instead of you, the customer, say bye-bye.
 
Institutional. If you are trying to measure account size, this was an account specific to certain pit-traded futures - hence the account was quite small.
 
Thank you for your kind offer of support. The issue was not a lack of communication. Tried a few more times with other ag markets and received more of the same - orders rejected unless market orders - no fast market conditions. In my opinion, alanm in the post above seems to have identified the most likely reason for the broker's behavior.
 
It's kind of surprising, though, for a big firm like that. It might be worth taking the other poster up on his offer just to find out if there's another reason for it.

I mean, if they don't want to do any work for a small account, it would seem that they wouldn't want to hold non-marketable limits either, which have the lowest chance of filling, but it sounds like this is OK with them. Significantly marketable limits are essentially market orders unless the market moves hard before he gets there with it - I don't know why they wouldn't accept them.
 
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