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How does my buy limit order not get filled on touch?
I have a question about the futures market makers. How does my buy limit order not get filled on touch? Are they still doing this by hand? In this age of super computers?
Can you help answer these questions from other members on NexusFi?
A limit order is not guaranteed to be filled. If it is filled, it will be at its stated price, but for it to be filled there must be orders on the other side that can be matched to it, at that price. Limit orders go into a queue on a first-come, first-served basis, and only as many will be filled as there are orders on the other side to match them to, at their price. If you want to buy, someone else needs to sell to you, and to have put in an order to do so. But there may not be any sell orders left at your price.
So if you are trying to buy and your position is far back in the queue, it may be that there are only enough sell orders at that price to accommodate some of the limit buy orders. Once the sellers at your price are all matched off to limit buys in the queue, then the market will move on, without you.
If you want to be guaranteed that you will get a fill, use a market order. You definitely will be matched to an order on the other side, but you may not get the price you want. If you will only accept the price you want, then use a limit order, but you may not get it filled, because you need for there to be an order to sell to you from another trader and there may not be any left at your price.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
This question and the responses shown above first appeared in the "ask any question" thread, and it seemed that it would be useful if it appeared in a stand-alone thread so anyone who was curious about the matter might be able to see it. (And anyone with a better understanding and a better explanation could have a chance to add to it. )
If anyone isn't clear about how and why their limit orders get filled or not filled, this can be a good question to get the answer to.
Feel free to join in, either with follow-up questions or additional points that have not been considered.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
It's about order type, not computers. If the market trades thru your price then you should be looking for a fill otherwise no guarantee. You can always use MIT (Market if Touched) but the risk there is that you may not like the price you get filled at because it's best available...
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