Question to Don Bright - Problems with odd lot MOO orders

H

h.amand

Hello,

a friend of mine advised me to ask mr. Bright the question about the problems i have. (he told me Mr. Bright is the opening guru of the world :-) Hope this is the right forum, thanks in advance for any help (from anyone ofcourse !)


This week i started trading and wanted to use MOO (market on open) orders. I want to trade $5000 every trade and want to trade on the opening price.

Therefore i used Interactive Brokers to place my orders. I placed MOO orders (tried one day at about 08:30 and today again at 09:20)

since i trade $5000 every time i do have odd lot orders all the time. My guess is that this is giving me a problem. A lot of the orders (5 out of 6 today and about the same yesterday) i get back with an "unknown error".

I trade all the Russel 1000 stocks. Up till now i only had problems with stocks that are not traded on the Nasdaq. The stocks that gave troubles today were DRI DL NST JCP and AHC

Can anyone tell me if my odd lots are indeed causing this problem and if so, is there any way to get them executed ? Or what would be better way to place my orders ?

Thanks in advance,

greetings,

Henri Amand
The Netherland
 
Thanks truncheon :-)

dgmodel: I want to trade all the 1000 stocks. I want to trade every position with an equal $5000 per position. This will enable me to have the same risk on every position without having to do to much calculations.

If a stock trades at for instance $3 i would trade 1666 stocks.

Now that is not a big problem to round that to 1700 and i might even do that....

but if a stock trades at $35 i would want to trade 143 stocks.

Here i would have a rounding problem. Round down ? Trade 100 stocks ?

Gives me less profit if the position goes the right way...

trade 200 stocks ? Gives me a higher risk if i keep my stop loss at 2%

So why not trade odd lots ? Apperantly because the industry dictates us to do it that way.... i am new to the US markets with MOO orders, had no problems in the past with normal odd lot orders when trading when the market was allready open. I find it very strange that the industry can dictate us that we should trade equal lots....

Hope you understand better now why i would like to trade odd lots.

greetings
 
Quote from h.amand:

Hello,

a friend of mine advised me to ask mr. Bright the question about the problems i have. (he told me Mr. Bright is the opening guru of the world :-) Hope this is the right forum, thanks in advance for any help (from anyone ofcourse !)


This week i started trading and wanted to use MOO (market on open) orders. I want to trade $5000 every trade and want to trade on the opening price.

Therefore i used Interactive Brokers to place my orders. I placed MOO orders (tried one day at about 08:30 and today again at 09:20)

since i trade $5000 every time i do have odd lot orders all the time. My guess is that this is giving me a problem. A lot of the orders (5 out of 6 today and about the same yesterday) i get back with an "unknown error".

I trade all the Russel 1000 stocks. Up till now i only had problems with stocks that are not traded on the Nasdaq. The stocks that gave troubles today were DRI DL NST JCP and AHC

Can anyone tell me if my odd lots are indeed causing this problem and if so, is there any way to get them executed ? Or what would be better way to place my orders ?

Thanks in advance,

greetings,

Henri Amand
The Netherland
More...

Can't use odd lots for opening only orders. You really need to read the basic threads on the Opening strategies...never ever use "market orders" for the openings...that is a fool's game. You only want "in" when you are on the same side as the Specialist, which would mean that you need to place limit orders away from the previous closing price. Do a search for "Don's opening's" before you go any further.

All the best!!

Don
 
Thanks for the reply.

Basics on the opening strategies are found in this forum ? I will do the search for the "don's openings".

I understand what you are saying about being on the same side as the specialist. However, i am a mechanical trader and use backtested strategies. If i would trade after the opening, or using limit orders, i might "risk" getting in at a higher price than my backtest will show or not get in at all. (and miss a winning trade)

I always had the idea that the opening rotation would atleast be a fair place to put an order because at that moment i would buy or sell at the same price as my "oponent". (bypassing the specialist) Apperantly the NYSE does not work that way. (i know the Nasdaq does... or atleast looks like it does, as far as my experience goes)

But as said, i understand what you mean... i might better look into way's of addapting limit orders in this strategy. All my strategies up till now had limit orders but this was the first one using market orders. Apperantly not a smart disision :-)

Thanks and greetings
 
Quote from h.amand:

Thanks for the reply.

Basics on the opening strategies are found in this forum ? I will do the search for the "don's openings".

I understand what you are saying about being on the same side as the specialist. However, i am a mechanical trader and use backtested strategies. If i would trade after the opening, or using limit orders, i might "risk" getting in at a higher price than my backtest will show or not get in at all. (and miss a winning trade)

I always had the idea that the opening rotation would atleast be a fair place to put an order because at that moment i would buy or sell at the same price as my "oponent". (bypassing the specialist) Apperantly the NYSE does not work that way. (i know the Nasdaq does... or atleast looks like it does, as far as my experience goes)

But as said, i understand what you mean... i might better look into way's of addapting limit orders in this strategy. All my strategies up till now had limit orders but this was the first one using market orders. Apperantly not a smart disision :-)

Thanks and greetings
More...

Hello, and good luck. I try to think of this strategy as "embracing" the Specialist (who makes the most money on any given stock, day in and day out)...rather than having an "opponent"...The "market" is your opponent, and the market always wins......

All the best...

Don
 
I just hope to win a little also :-)

But i am reading the "don's openings" threads now... understand that it is a way of placing your orders so you have a little advantage yourself....

Well, one conclusion is for sure... still a lot to learn. As alway's...

Greetings
 
If you are just trying to get in on the open for stocks you've selected (rather than Don's opening strategy), then try a simple market order routed directly to NYSE rather than an MOO.

I have had the same problem as you (MOO rejected) for an odd lot and this worked. I got the opening print. Mind you, I only did this once, but it worked.

Good luck!
 
You must log in or register to reply here.
Back
Top