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what order uses a professional/institutional trader to enter in a position?


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what order uses a professional/institutional trader to enter in a position?

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  #1 (permalink)
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Hi guys.

market orders or limit orders?

What do you think about this? and why?


Regards.

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Depends on the situation and the sense of urgency.
Limit order if building/reducing a position, market order if more agressive

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  #4 (permalink)
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Market order- guaranty to get in a trade (but can pay slippage)
Limit order - May not get filled and miss the trade or the close if already got an open position

IH

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jossfx View Post
Hi guys.

market orders or limit orders?

What do you think about this? and why?

Regards.

Depends what you mean by Professional and Institutional. In my experience the two are very different but again it all depends upon definitions. Either way I don't think either trade in the way retail traders imagine. But being 100% over generalist I would agree with @rleplae

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Institutions/Professional desks whether trading prop capital or hedging may use both limit, stop and market orders depending on the size of their order relative to the liquidity of the underlying asset.
However, due to the large order size that institutions may use, the orders could be parceled with an algo that may divide the orders over time or price increments.

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mattz View Post
Institutions/Professional desks whether trading prop capital or hedging may use both limit, stop and market orders depending on the size of their order relative to the liquidity of the underlying asset.
However, due to the large order size that institutions may use, the orders could be parceled with an algo that may divide the orders over time or price increments.

Matt Z
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in general, for stocks, what's the amount that can be preceived as institutional?
how about index futures like emini ES?

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  #8 (permalink)
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in general, for stocks, what's the amount that can be preceived as institutional?
how about index futures like emini ES?

I think it's a matter of opinion, but for ES for example, 250 lots per order/5,000 RTs a day could be considered institutional
Individual who are of higher net worth traders who may use the same size.

In stocks I am not sure per order, but total Vol of a mil a day could be considered a larger size.

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  #9 (permalink)
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Depends on the size of the institution but large institutions use more SP (SP500 x $250) rather than ES (SP500 x $50) at size. Limit orders lifting the offer (buying at the ask price) or hitting the bid (selling at the bid price) are typically used instead of market orders to limit slippage. Unless the market is moving wildly, like during Brexit vote results, you can get filled in this way.

Using a market order is like hitting the eject button or jumping onto a wave when getting into a trade. If you don't mind a little slippage then it'll get the job done but the results are a bit unpredictable.

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