re sell IBM 18.5... this would be such a simple problem to fix, all the way through the system! At the minimum, any order-entry interface should ask for confirmation and
also report an error if the entered price is too far
from the bid/ask prices.
IBM trades on NYSE but also is handled on the Island ECN -
if you had routed the limit order to Island, it would have
crossed the best ECN bid automatically, which is probably
a lot closer to the market than 3 points!
If you frequently need to go outside the bid/ask to get
filled- What kind of software are you using to route orders?
I find the most effective thing is to avoid routing via SelectNet if possible since the time to cancel is so high.
If you can tell your system to automatically check the ECNs first, and the stock has enough volume that the ECNs will be near the inside and give you an immediate fill.
If that does not work, i.e. you hit an ECN price but
get no fill, it could be that your quotes are delayed
so you see phantom bids.
At any rate, it's usually worth trying to split the
spread on the initial offer and hope to get filled.
Chances of doing this are again better if you route the
order to Island - you're more likely to get filled
by splitting the inside quotes if everyone sees
your offer on top - AND knows it's a liable order.
If your order is represented by some MM, it'll be
slower to appear AND less likely to fill, since other
people avoid trading with MMs...
One difficulty posed by decimalization with this
kind of bidding is that it's very easy for someone
to outbid you by just 0.001 . So, the order-entry
interfaces could use a "stay on top" feature as well.
If I get outbid by a non-penny price, I figure it's
likely that some computer program is competing with
me to buy and calculating the price (humans presumably
use the round-penny prices) and I'll be more aggressive
in chasing the price than otherwise...
MfN |
