4 ms·

Yes if you've ever had an order not get completely filled... happens to me a lot, it's kind of annoying and usually not worth chasing the price up. Every small

Yes if you've ever had an order not get completely filled... happens to me a lot, it's kind of annoying and usually not worth chasing the price up. Every small investor should use limit orders. Market orders are rigged at the Market Maker levels via a process called Slippage. "Slippage occurs when a market maker changes the spread to his advantage on market orders." basically they stretch the spread out forcing you to pay a higher or get a lower price for the stock to their advantage since they fill the quantity from their own volume.

throwaway13qf85 13y ago
That is the entire game of market making. You are literally complaining about market makers doing their jobs. As a market maker, I might sit out there offering to buy 1000 shares of Microsoft at $40.20 and sell 1000 shares at $40.30. Then someone comes along and buys 1000 shares from me at $40.30, so I need to put a new quote into the market. Do I put it in at $40.30 again? Hell no! There are two main reasons why not - 1. I know that there are buyers out there, and most likely the reason there are buyers at $40.30 is because they believe the stock is worth more than that. I need to revise my prices upward to reflect that new information. 2. I'm now short 1000 shares of MSFT. If the price goes up further, I will lose out. I need to persuade someone to sell me 1000 shares to cover that short position, so I need to offer more money - therefore I need to raise my quotes. Most likely is that I'd now put in a new offer at $40.32 and raise my bid from $40.20 to $40.22. This is the mechanism by which market prices reflect new information. Market makers change their prices to reflect information in the order flow. This is the entire reason that liquid, efficient markets are able to exist.

4 ms·

Yes if you've ever had an order not get completely filled... happens to me a lot, it's kind of annoying and usually not worth chasing the price up. Every small

by megaframe 13y ago

throwaway13qf85 13y ago
That is the entire game of market making. You are literally complaining about market makers doing their jobs. As a market maker, I might sit out there offering to buy 1000 shares of Microsoft at $40.20 and sell 1000 shares at $40.30. Then someone comes along and buys 1000 shares from me at $40.30, so I need to put a new quote into the market. Do I put it in at $40.30 again? Hell no! There are two main reasons why not - 1. I know that there are buyers out there, and most likely the reason there are buyers at $40.30 is because they believe the stock is worth more than that. I need to revise my prices upward to reflect that new information. 2. I'm now short 1000 shares of MSFT. If the price goes up further, I will lose out. I need to persuade someone to sell me 1000 shares to cover that short position, so I need to offer more money - therefore I need to raise my quotes. Most likely is that I'd now put in a new offer at $40.32 and raise my bid from $40.20 to $40.22. This is the mechanism by which market prices reflect new information. Market makers change their prices to reflect information in the order flow. This is the entire reason that liquid, efficient markets are able to exist.