question about bid/offer and limit orders. Thanks!!!

October 6th, 2011, 02:50 AM

If the market is currently trading above my buy limit but comes down such that 5 contracts are bid at my limit price and 4 of those contracts are sold into( I am last in queue), will my order remain unfilled or will it automatically hit into the offers?

Thanks

October 6th, 2011, 04:47 AM

Whether your buy limit order will be hit or not, depends on the depth of the order book.

The buy limit orders are matched with sell market orders.

If your limit price is the current best bid and 5 new market sell orders are coming in, those will be matched with the best bid buy orders.

If your order is in the end of the queue, you will only get filled, if there are less than 5 other orders (by volume) sitting in front of you.

October 7th, 2011, 11:05 PM

nepenthean

If the market is currently trading above my buy limit but comes down such that 5 contracts are bid at my limit price and 4 of those contracts are sold into( I am last in queue), will my order remain unfilled or will it automatically hit into the offers?

Thanks

no your order would remain unfilled. a limit order will not turn into a market order just because it is not filled. if you wanted that kind of execution you would need a specialized type conditional order that you would need to create yourself.

this seems like an interesting question. i wonder how you thought of this situation. did you see something like this happen in the book? if so can you describe it?

question about bid/offer and limit orders. Thanks!!!

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question about bid/offer and limit orders. Thanks!!!