Placing market buy order on market open compared to limit order

L

lmseldin

Example: Stock closed the night before $10.

I like that price based on my trading system. So I place a limit order the next day for $10.

I really don't like to place a buy on market open, afraid of lack of control. So If the market open is $9.50, will I be filled at $10 or $9.50?

Can't a market maker make the market price whatever he wants?

Thank you,

Larry
 
lmseldin said:
Example: Stock closed the night before $10.

I like that price based on my trading system. So I place a limit order the next day for $10.

I really don't like to place a buy on market open, afraid of lack of control. So If the market open is $9.50, will I be filled at $10 or $9.50?

Can't a market maker make the market price whatever he wants?

Thank you,

Larry
More...
Every exchange has its own opening process rules and algorithms.
But "usually", in you example, you'd be filled at $9.50.
 
But it can depend somewhat on where you are in the queue and what opening buy size is if there is enough comparable opening sell size to hit your limit.
 
lmseldin said:
Example: Stock closed the night before $10.

I like that price based on my trading system. So I place a limit order the next day for $10.

I really don't like to place a buy on market open, afraid of lack of control. So If the market open is $9.50, will I be filled at $10 or $9.50?

Can't a market maker make the market price whatever he wants?

Thank you,

Larry
More...
You prolly have seen, but if not, a graphic depiction of the price discovery dogfight can be a good place to get a feel for some nuts and bolts. Shorty's video given by full time youtube trader and occasional pole-dancer, humbled trader...

 
lmseldin said:
Example: Stock closed the night before $10.

I like that price based on my trading system. So I place a limit order the next day for $10.

I really don't like to place a buy on market open, afraid of lack of control. So If the market open is $9.50, will I be filled at $10 or $9.50?

Can't a market maker make the market price whatever he wants?

Thank you,

Larry
More...

As far as I know, a limit order is totally different from a market on open order. And it's either or. You either enter a limit order or a market on open order but not both. If you entered a limit order to buy at $10 that means the highest price that you would ever want to pay is $10 and no higher so if the market opens the next day at $15.00, your order won't get filled. But if you enter a market on open buy order then like what you said, you won't have any control over the price and you will buy at whatever price that the market opens at. So if the opening price is $15, your market on open buy order is going to be filled at $15.00.

But in this specific case, since the market open price is lower than your limit order price of $10, then you will be filled at $9.50 regardless whether you used a limit order or a market on open order. To me if you want some control on the price, always use a limit order.
 
lmseldin said:
2Rosy,
I was not talking about a specific exchange. However, I trade mostly ETFs.
rb7,

But "usually", in you example, you'd be filled at $9.50.
Thank you,
Larry
More...
%%
$9.50 fill for a buy limit order, on SCHW is most likely .
And if you were selling ETF for a $9.50 limit, say good till cancel order limit + it opens @$10, you get $10. I cant think of a worse time to use a market buy ,@ open.
 
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