Stocks & Commodities V. 24:2 (19): Q&A by Don Bright
SINCE YOU ASKED
Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http:// Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.
FILLED ORDER SPLITS
How do specialists determine the split on orders being filled? How many shares does each get, and does it depend on how the specialist feels that day? Talk
about handing over a blank check.ó
Itís very important, in my opinion, that traders understand all this before they start trading. Things change and there are exceptions, but in general, you
can count on five things:
1. Time priority.
2. Once you have received any part of your order (say 100 of 500), you may be on parity with other orders with the same price limit. Getting the 100 shares can be
like the kiss of death, and I usually just cancel the rest, adjust the price limit, and go on trading.
3. Size priority. If your order cannot fill the matching (opposite side) order and another order can, itís
possible to be sized out. This is rare, but it does happen at times.
4. Long market, long limit. Short market, short limit. If you are selling short 1,000 shares at 39.01, and there are 10,000 other people with orders at the same price, you may not be filled since youíre last in line. But if they trade through your price, you will be filled.
5. Matching orders. Your order may be matched by the specialist, and/or he may share your order with another broker for fairness.