Is it like you see the price of the stock you want, and you can immediantly put in a limit order at that exact price?
Of course you may put in a limit order to buy the stock at the same price as the last trade, but there is no guarantee that someone will sell it to you at that price so your order may not get filled.
Do not make the mistake of thinking that you are getting the best price simply by entering a limit order for the same price you saw the last trade go across at. You would be better served by looking at the bid, the ask and the size. For instance, the stock may have a 5.25 bid and a 5.30 offer. The last trade may have went across at 5.30, buy you have a good chance of being able to buy the stock at 5.25. You simply enter your limit order at 5.25, look at the size of the bid, let’s say for example it was 1000 before you entered your limit order to buy 100 shares. When you enter your limit order the size will increase to 1100, and you know that there are 1000 shares to move before your order becomes next in line. Also, this example assumes a static environment, in reality the bids, offers and sizes are often changing.
December 23rd, 2009 at 9:15 pm
Of course you may put in a limit order to buy the stock at the same price as the last trade, but there is no guarantee that someone will sell it to you at that price so your order may not get filled.
Do not make the mistake of thinking that you are getting the best price simply by entering a limit order for the same price you saw the last trade go across at. You would be better served by looking at the bid, the ask and the size. For instance, the stock may have a 5.25 bid and a 5.30 offer. The last trade may have went across at 5.30, buy you have a good chance of being able to buy the stock at 5.25. You simply enter your limit order at 5.25, look at the size of the bid, let’s say for example it was 1000 before you entered your limit order to buy 100 shares. When you enter your limit order the size will increase to 1100, and you know that there are 1000 shares to move before your order becomes next in line. Also, this example assumes a static environment, in reality the bids, offers and sizes are often changing.
References :