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> Seriously, those things should just be banned from retail investment and retail investment education. What? That's absurd, you want to ban "buy/sell now" at

> Seriously, those things should just be banned from retail investment and retail investment education. What? That's absurd, you want to ban "buy/sell now" at the market price? There is no justification for wanting to ban the most basic and most ordinary transaction type.

mrchicity 11y ago
Thing is, that's rarely someone's intent. You wouldn't sell all your stocks for a penny if there were no bids in the market. That's why we have things like circuit breakers and price limits.
- gnaritas 11y ago
  >Thing is, that's rarely someone's intent. I'd argue fill my order "now" is pretty much aways everyone's intent.
  - kasey_junk 11y ago
    It's not though. You and I may understand the complexity that is actually hidden in a market order and what it means for our execution risk but for many many participants it is closer to "hmmmm, goog is at $630.36? I'd take some of that. Market Order sent. I got filled at 630.45? WTF the markets are rigged, HFTs are front running me". So I wouldn't argue for banning market orders, but I'd probably stop using them as the defaults for people. Making people set limit order prices seems like it would encourage more people to understand the market dynamics.
    - gnaritas 11y ago
      Then they'd just complain about partial fills and failed orders and still blame HFT, I don't see that changing the default would solve anything at all.
      - kasey_junk 11y ago
        I suspect folks will blame HFT for ever, that isn't really my point. Having to think about price limits and partial fills is good for anyone who is attempting to make a transaction as it removes an abstraction that is dangerous in many cases.
        gnaritas 11y ago
        I understand your point, I just don't think that's what would happen. The aren't going to think about those things anymore than they think about slippage with a market order. Whatever you give them, it won't match their ideal of fill me now at X price with no errors and they're going to complain either way and they're not going to think about it beforehand regardless of the default.
    - secabeen 11y ago
      Do people really care about a 0.04% difference in price on stock orders? When I make a market order, I'm investing, not trading. As long as my order is within a percentage point of the quote I got when I opened the trade window, I really don't care. My intention is to make tens or hundreds of percentage points on my investment over years. Were I trading, I might think differently, but traders should be expected to know about limit orders.
      - kasey_junk 11y ago
        I picked those numbers to be a bit ridiculous. That said, even as a long term buy and hold participant there is some number where you don't think your investment choice makes sense. If you encode that value into your order you are protected from flashes and guaranteed to get your order for up to that price (assuming the liquidity exists to support your order).
bcoates 11y ago
That's not what a market order does. It buy/sells at an unknowable future price.
- gnaritas 11y ago
  I trade, I know exactly what a market order is. It buys at the current market price, which during the filling of the oder may slip as liquidity slips; that's the entire point, fill this order now no matter what. To not have such an order means having your entries and exits fail or partially fill which means you'll just have to reinvent the market order yourself to continue pushing through your order. To ban a market order is to tell me I'm not allowed to enter/exit a position in a single order, that's non-sense. If you don't want slippage, don't use a market order but that comes with the side effect of failed/partially filled orders.
  - gd1 11y ago
    >To ban a market order is to tell me I'm not allowed to enter/exit a position in a single order, that's non-sense. You could carry on trading as you currently are. If a stock is trading $100/$100.1 and you want to buy it ('now' as you say), then just set your limit to $1000. Of course, you will have no one to blame but yourself if, during the ~50 milliseconds it takes for the order to reach the exchange, the market makers have switched off and you end up crossing a massive spread and buying the only available offer at $600 or something. An incredibly unlikely scenario, but it can happen. So I imagine you'll set your limit to something sensible, like $101. It'll still get filled 'now' 99.9999% of the time. But you won't be taking the risk of doing something epically stupid. There, that wasn't so hard now was it?
    - gnaritas 11y ago
      > So I imagine you'll set your limit to something sensible, like $101. It'll still get filled 'now' 99.9999% of the time. But you won't be taking the risk of doing something epically stupid. Your scenario doesn't handle the case a market order does, i.e. close my position now. In a fast moving market, using limit orders for stops or exits is just going to result in partial fills or failed orders. If I want out, I want out, I don't only want out if I lose between X and Y, I want out period; that's what market orders are for, for that convenience, you accept slippage as a reality. > There, that wasn't so hard now was it? No, it's easy to do things that don't work, I can pump my order into /dev/null, that's easy too, and it's just as useful as a limit order for stops.

mrchicity 11y ago

Thing is, that's rarely someone's intent. You wouldn't sell all your stocks for a penny if there were no bids in the market. That's why we have things like circuit breakers and price limits.

gnaritas 11y ago
>Thing is, that's rarely someone's intent. I'd argue fill my order "now" is pretty much aways everyone's intent.
- kasey_junk 11y ago
  It's not though. You and I may understand the complexity that is actually hidden in a market order and what it means for our execution risk but for many many participants it is closer to "hmmmm, goog is at $630.36? I'd take some of that. Market Order sent. I got filled at 630.45? WTF the markets are rigged, HFTs are front running me". So I wouldn't argue for banning market orders, but I'd probably stop using them as the defaults for people. Making people set limit order prices seems like it would encourage more people to understand the market dynamics.
  - gnaritas 11y ago
    Then they'd just complain about partial fills and failed orders and still blame HFT, I don't see that changing the default would solve anything at all.
    - kasey_junk 11y ago
      I suspect folks will blame HFT for ever, that isn't really my point. Having to think about price limits and partial fills is good for anyone who is attempting to make a transaction as it removes an abstraction that is dangerous in many cases.
      - gnaritas 11y ago
        I understand your point, I just don't think that's what would happen. The aren't going to think about those things anymore than they think about slippage with a market order. Whatever you give them, it won't match their ideal of fill me now at X price with no errors and they're going to complain either way and they're not going to think about it beforehand regardless of the default.
  - secabeen 11y ago
    Do people really care about a 0.04% difference in price on stock orders? When I make a market order, I'm investing, not trading. As long as my order is within a percentage point of the quote I got when I opened the trade window, I really don't care. My intention is to make tens or hundreds of percentage points on my investment over years. Were I trading, I might think differently, but traders should be expected to know about limit orders.
    - kasey_junk 11y ago
      I picked those numbers to be a bit ridiculous. That said, even as a long term buy and hold participant there is some number where you don't think your investment choice makes sense. If you encode that value into your order you are protected from flashes and guaranteed to get your order for up to that price (assuming the liquidity exists to support your order).

bcoates 11y ago

That's not what a market order does. It buy/sells at an unknowable future price.

gnaritas 11y ago
I trade, I know exactly what a market order is. It buys at the current market price, which during the filling of the oder may slip as liquidity slips; that's the entire point, fill this order now no matter what. To not have such an order means having your entries and exits fail or partially fill which means you'll just have to reinvent the market order yourself to continue pushing through your order. To ban a market order is to tell me I'm not allowed to enter/exit a position in a single order, that's non-sense. If you don't want slippage, don't use a market order but that comes with the side effect of failed/partially filled orders.
- gd1 11y ago
  >To ban a market order is to tell me I'm not allowed to enter/exit a position in a single order, that's non-sense. You could carry on trading as you currently are. If a stock is trading $100/$100.1 and you want to buy it ('now' as you say), then just set your limit to $1000. Of course, you will have no one to blame but yourself if, during the ~50 milliseconds it takes for the order to reach the exchange, the market makers have switched off and you end up crossing a massive spread and buying the only available offer at $600 or something. An incredibly unlikely scenario, but it can happen. So I imagine you'll set your limit to something sensible, like $101. It'll still get filled 'now' 99.9999% of the time. But you won't be taking the risk of doing something epically stupid. There, that wasn't so hard now was it?
  - gnaritas 11y ago
    > So I imagine you'll set your limit to something sensible, like $101. It'll still get filled 'now' 99.9999% of the time. But you won't be taking the risk of doing something epically stupid. Your scenario doesn't handle the case a market order does, i.e. close my position now. In a fast moving market, using limit orders for stops or exits is just going to result in partial fills or failed orders. If I want out, I want out, I don't only want out if I lose between X and Y, I want out period; that's what market orders are for, for that convenience, you accept slippage as a reality. > There, that wasn't so hard now was it? No, it's easy to do things that don't work, I can pump my order into /dev/null, that's easy too, and it's just as useful as a limit order for stops.