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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 circ

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).

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).