# Sell at market or limit



## none (Jan 15, 2013)

How do most people buy/sell their stocks/ETFs? Market or limit.

If it is limit, how do you choose your point? Mean of the bid/ask or what?

Thanks for the feedback.


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## james4beach (Nov 15, 2012)

I always use limit orders. It's just safer and reduces the opportunities for the broker and middlemen to rip you off.

If it's a very liquid stock/ETF (0.01 spread) that's dancing around the current price, and if I feel lucky, then I'll put in a limit buy order at the current bid, but this is somewhat of a game and probably a waste of time.

Much more often, I'll just limit buy at the exact current ask for an instant fill. No reason sitting around waiting to save a penny, when you've decided you want to trade. Just agree to the current bid or ask -- provided that the number of shares being shown can easily satisfy your trade (e.g. ask size 500 shares, and you're only buying 100) taking into account the board lot multiplier.

If I'm buying a large number of shares, I will place my buy limit a little bit higher than the quoted asking price. For example if ask size is 500 and you want to buy 600, you can't just limit buy at the exact asking price... you'll be grabbing those 500 shares, and the new asking price will be higher. In a case like that I would bid a penny or two above the asking price.

In a fast moving market I'll also bid a few cents OVER the asking the price to guarantee a fill. Your limit still defines the worst price you'll accept.


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## w0nger (Mar 15, 2010)

i never use market orders...


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## lonewolf (Jun 12, 2012)

When I used to use Lind Waldock I used "market if touched" As soon as the market hit a certain price the buy or sell order kicked in. I was basing my trading on price pattern. If I used a limit order & my order never got filled & I was supose to buy or sell @ a certain level I would have failed to follow my method.

Basing my trading on cycles I use @ the market. The precise moment that I expect a high I sell. The precise moment I expect a low I buy. If I used a limit order & the order is not filled @ the precise time of the high or low I have stopped using my method.

Price pattern use (market if touched)
cycles use (market order placed based on time) 

Iam not sure if market if touched orders can be used in Canada ? I do not see it on CIBC investors edge. Maybe its there


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## lonewolf (Jun 12, 2012)

The commision might be higher on a limit order


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## lonewolf (Jun 12, 2012)

The more liquid the market the less slipage when using MIT orders.


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## none (Jan 15, 2013)

Limit it is.

Thanks for the help.


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## blin10 (Jun 27, 2011)

I once wanted to buy petro canada a while ago, placed limit order for 1000 shares at $20, it went all the way to $20.02 or something like that and i never got the shares... then later, suncor bought them for 40$ a share... since then I never use limit order, always market


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## gibor365 (Apr 1, 2011)

blin10 said:


> I once wanted to buy petro canada a while ago, placed limit order for 1000 shares at $20, it went all the way to $20.02 or something like that and i never got the shares... then later, suncor bought them for 40$ a share... since then I never use limit order, always market


Had similar story with Magna, missed by 2 cents and Magna started soaring.... i mostly buy/sell at market


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## humble_pie (Jun 7, 2009)

james4beach said:


> I always use limit orders. It's just safer and reduces the opportunities for the broker and middlemen to rip you off.
> 
> If it's a very liquid stock/ETF (0.01 spread) that's dancing around the current price, and if I feel lucky, then I'll put in a limit buy order at the current bid, but this is somewhat of a game and probably a waste of time.
> 
> ...



what strange talk from someone who insists he is fervently 92% fixed income/GICs plus 8% etfs. But. Never. Stocks.

fwiw i place limit orders. Always to buy below the offer or to sell above the bid. I always get filled. There's an art to it.


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## BigMFfan (Feb 23, 2013)

humble_pie said:


> fwiw i place limit orders. Always to buy below the offer or to sell above the bid. I always get filled. There's an art to it.


I also try to do this, but set a price I strongly feel will be filled within a few minutes of placing the order. When I used to use market price, I thought at times I didn't get the price I should, possibly because I had an odd lot amount, or for some reason, my order had to be "reviewed" before it was put though.


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## Feruk (Aug 15, 2012)

Depends on liquidity. If it's a heavily traded stock, market's fine. Anything with low volume, always limit.


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## lonewolf (Jun 12, 2012)

Humble_ pie

Options have a wide bid/ask spread compared to underlying. I have used market orders to buy & sell options on spy,spx,gld, slv to name a few & I hardly ever sell @ the bid or buy @ the ask I uisualy get filled around the middle of the bid & the ask.

If Iam looking to buy & not going to be around to keep an eye on things I will place a limit order or orders that will most likely kick in if the underlying hits my target area as well as below what the option should sell for if the underlying is trading @ a certain level. You never know when someone could dump thier options.

In the event of a market crash & Iam holding put options especialy if they are OTM I want to place a market order near the bottom & or @ max momentum down. I dont want to play any games with the timing in certain cases where option prices can be cut in half in hour.

I think Feruk is right regarding the liquidity


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## Spidey (May 11, 2009)

Feruk said:


> Depends on liquidity. If it's a heavily traded stock, market's fine. Anything with low volume, always limit.


I agree. Usually I use limit orders, but if I am selling something like BMO I usually just place a market sell on an "up" day. Sometimes you can screw yourself with limit orders by setting the limit just above the day's trading (and miss the sale on a good day) or lower than the direction that the market has moved. That being said, I still use mostly limit orders.


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## Eclectic12 (Oct 20, 2010)

none said:


> How do most people buy/sell their stocks/ETFs? Market or limit.
> 
> If it is limit, how do you choose your point? Mean of the bid/ask or what?


I've used market order twice when I wanted to sell asap as I'd heard news that made me believe the stock would tank. There were Nortel @ $11 and Agrium @ $110.

Most of my orders I've already made the decision to buy/sell so I'll check the spreads and most often put the limit a bit off what's happening (ex. on a sell, a bit below the bid & on the buy, a bit above the ask). The order is filled something over 98% of the time. I've occasionally had to adjust the limit so that the order is filled. 

Where I'm more patient - I'll set the limit to what I want and monitor the order. For example, if the share price hit my target price yesterday but closed below, early in the day I'll set it for the higher price and check in the afternoon. 

If the price stays down, I'll either stick with it patiently or modify the order to force the trade to happen. The issue for me is with the job I have, I never know when I might be tied up for a while & unable to check the order again.




lonewolf said:


> The commision might be higher on a limit order


Can you point me a fee schedule or link that provides the details of when this could happen? 

Mine have been the same price - market or limit. As well, the fee schedules I've read say that the commission will be the same.




blin10 said:


> I once wanted to buy petro canada a while ago, placed limit order for 1000 shares at $20, it went all the way to $20.02 or something like that and i never got the shares... since then I never use limit order, always market


The flip side of the coin is my brother-in-law wasn't paying attention to the daily share volatility of JDS Uniphase in 1999/2000. He used a market buy that was filled at $35 *more* per share than he wanted to pay.

So whatever one chooses, be aware of and plan for the possibilities.




Feruk said:


> Depends on liquidity. If it's a heavily traded stock, market's fine.


My brother-in-law disagreed as per the example above. 

IMO, a second factor is how widely different the share price has usually been in the recent past. If one knows that the shares can swing well beyond what one wants - why risk a market order?


Cheers


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## Toronto.gal (Jan 8, 2010)

Eclectic12 said:


> Can you point me a fee schedule or link that provides the details of when this could happen?


I think when Lonewolf said that the commission could be higher on a limit order, that he might have been referring to limit orders that get only partially filled.

When that happens, and the balance fills the next day [unless it's cancelled], then there are 2 settlement dates, hence 2 separate fees. It has happened to me a couple of times because I sometimes place orders close to 4 p.m.

Also, if a same day limit order does not get filled by 4 p.m., the broker might still be able to match your price & complete your order after market hours [even though it was a day order]. I recently had an order fill at 5:30 p.m, and only found out the next day. On my records, it showed having filled the next day at 9:30 a.m., but when I called the broker, they told me it had filled at 5:30 p.m. the prior day. Had my order gotten partially filled by 4, and the balance after market hours, then I would have incurred 2 commission fees as well.

I would say that I use market-order about 5% of the time for some of the reasons you mentioned upthread.


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## Eclectic12 (Oct 20, 2010)

Toronto.gal said:


> I think when Lonewolf said that the commission could be higher on a limit order, that he might have been referring to limit orders that get only partially filled.
> 
> When that happens, and the balance fills the next day [unless it's cancelled], then there are 2 settlement dates, hence 2 separate fees. It has happened to me a couple of times because I sometimes place orders close to 4 p.m. ...


I thought this might be the case but didn't remember what this was called so I left it for whomever to fill in the blanks. :biggrin:

The big thing for me was to make sure there wasn't something new I wasn't aware of. As well, for new people to indicate that the type of order likely does not guarantee different commission amounts.




Toronto.gal said:


> I would say that I use market-order about 5% of the time for some of the reasons you mentioned upthread.


As high as 5%, eh?

I missed mentioning upthread that one of the risks of a limit order that is staying open for days, if not a month is that a flash crash could trigger the order. 

Personally, I tend to have orders open for a few hours plus only about four orders or less at the same time so I'm not worried about the possibility.


Cheers


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## Toronto.gal (Jan 8, 2010)

Eclectic12 said:


> 1. As high as 5%, eh?
> 2. one of the risks of a limit order that is staying open for days, if not a month is that a flash crash could trigger the order.


*1.* For someone who day-trades considerably, it's actually not a high %. I use it mostly when a trend is quickly reversing, and there are a few other instances when it makes sense to use, like the ones u mentioned as well. The mistake is when people use it to chase a stock, but I normally use it when selling, not buying, and mostly when I'm on the + side already. 

*2.* That's a very good point! And now I'm careful to delete day-orders that did not get filled [for reasons mentioned upthread].


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## lonewolf (Jun 12, 2012)

Some brokerage firms charge more for limit orders then market orders. Check the commision rate schedule to see if a higher commision is payed for limit orders. Not all brokers charge more for limit orders.


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## My Own Advisor (Sep 24, 2012)

I do both.


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## mrPPincer (Nov 21, 2011)

I use limit orders and place my bid below the highest current one or my ask above the lowest current one and wait it out.
By letting the market come to me this way I have the side benefit of not paying the ECN fees for reducing market liquidity.


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## Toronto.gal (Jan 8, 2010)

Price control is key most of the time, but limit orders don't come with zero risks either. As markets/volume move fast, you'll get the price you want with LOs, except when the markets move against you big time, and then, if impatient, you might end up paying more than you had initially planned for, either on the same or later date. So IMHO, a person can in fact be chasing a stock with either a limit or market order.

ECN fees & reducing market liquidity should not be a considering factor on the rare occasion that one might need to use market price for x,y,z reason. 

I use limit orders most of the time, except when [day] trading, sometimes have found it necessary to use market orders. For example, as I pay a consolidated fee for trading same stock on the same day, a market order has allowed me to sell/save time & then repurchase the stock at lower prices, especially when market news had made prices volatile, and I don't mean buying a penny cheaper, but sometimes dollars cheaper. 

At the end of the day, it's all about discipline/risk management.


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