Investing

Market Buy Order greater than Posted Ask Price

  • Last Updated:
  • May 10th, 2015 6:13 am
Tags:
None
[OP]
Deal Addict
Dec 3, 2014
1572 posts
102 upvotes
New Westminster, BC

Market Buy Order greater than Posted Ask Price

Have you ever placed a Market Buy Order that was greatly more than the posted Ask price?
I placed a market buy order and the posted ask price was 9.74. My market buy order went through with 9.82.
The ask size was well over my buy size. Ask size was in the ten of thousands. My purchase was only for a few hundred shares (195).
I understand that there will be a discrepancy without real time quotes but that seems a bit much.
12 replies
Deal Fanatic
User avatar
Sep 23, 2009
5925 posts
3486 upvotes
What's a reasonable amount to you?

Where are you trading that you don't even get real-time quotes? That seems unusual to me.
Deal Addict
Mar 8, 2013
2812 posts
1487 upvotes
gelato69 wrote: Have you ever placed a Market Buy Order that was greatly more than the posted Ask price?
I placed a market buy order and the posted ask price was 9.74. My market buy order went through with 9.82.
The ask size was well over my buy size. Ask size was in the ten of thousands. My purchase was only for a few hundred shares (195).
I understand that there will be a discrepancy without real time quotes but that seems a bit much.
How are you going to prove that the ask price was 9.74 when you submitted your order? I cannot imagine a situation that requires a Market Buy Order. Market Sell Order is different, in my opinion.
Member
Sep 9, 2012
372 posts
119 upvotes
TORONTO
Did all 195 shares fill at $9.82, or was that your average price?
Deal Addict
Dec 28, 2009
1304 posts
1051 upvotes
Montreal, QC
gelato69 wrote: Have you ever placed a Market Buy Order that was greatly more than the posted Ask price?
I placed a market buy order and the posted ask price was 9.74. My market buy order went through with 9.82.
The ask size was well over my buy size. Ask size was in the ten of thousands. My purchase was only for a few hundred shares (195).
I understand that there will be a discrepancy without real time quotes but that seems a bit much.
The bid/ask is only for lot sizes (100 shares for stocks over 1 dollar). If you submit an order for 195 shares, 100 will go to the regular order book, 95 will go to the odd lot book. The odd lot market maker will take a premium for filling your non standard order size, and you will generally get filled at a higher price on a buy or a lower price on a sell. If you had bought 200 shares instead, you would have been filled at 9.74 assuming there was a lot size of (2) or 200 shares on the ask. Hope that helps!
[OP]
Deal Addict
Dec 3, 2014
1572 posts
102 upvotes
New Westminster, BC
TorontoDavid wrote: Did all 195 shares fill at $9.82, or was that your average price?
Average price.
habsfan321 wrote: The bid/ask is only for lot sizes (100 shares for stocks over 1 dollar). If you submit an order for 195 shares, 100 will go to the regular order book, 95 will go to the odd lot book. The odd lot market maker will take a premium for filling your non standard order size, and you will generally get filled at a higher price on a buy or a lower price on a sell. If you had bought 200 shares instead, you would have been filled at 9.74 assuming there was a lot size of (2) or 200 shares on the ask. Hope that helps!
Yeah, it probably was the odd lot size. I knew there would be a premium for odd lots but still.
Member
Sep 9, 2012
372 posts
119 upvotes
TORONTO
gelato69 wrote: Average price.

Yeah, it probably was the odd lot size. I knew there would be a premium for odd lots but still.
Indeed - habsfan321 said what I was getting at, which is odd lots and full/board lots fill differently. Retail investors can typically only view the 'board-lot' bid and ask prices.

Depending on the liquidity of the security, the odd lot price can be substantially different - in this case to the tune of $.08/share (or 0.82%).
Deal Addict
User avatar
Jan 14, 2012
1259 posts
286 upvotes
Woodbridge
Seems odd,
What were your fills/stock/time? I can check it out for you if you want.

The first 100 should have been at ask if there were that many shares available, and the 95 would have been odd lot at premium but for it to increase .08 on the whole 195 shares it would have been a huge diffrence (close to 16 cent premium) which seems high for me, but I have seen crazier things.
Deal Fanatic
Feb 4, 2015
8901 posts
5171 upvotes
Canada, Eh!!
Always put limit orders.

Too risky in case there is some extreme order to sell that collects your market buy.

Also, try to buy in round lots.
Deal Fanatic
User avatar
Feb 19, 2010
6237 posts
2986 upvotes
georvu wrote: Always put limit orders.

Too risky in case there is some extreme order to sell that collects your market buy.

Also, try to buy in round lots.
Anonymouse wrote: I find it touching that there are people in the world who will go into a market and say "I am willing to buy what you are selling for any price you care to name." The naivety involved is innocent and childlike.

(Always use limit orders.)
+1 to both of these. The connotation of "market" order is "please take my moneyr".
[OP]
Deal Addict
Dec 3, 2014
1572 posts
102 upvotes
New Westminster, BC
Johnny0c wrote: Seems odd,
What were your fills/stock/time? I can check it out for you if you want.

The first 100 should have been at ask if there were that many shares available, and the 95 would have been odd lot at premium but for it to increase .08 on the whole 195 shares it would have been a huge diffrence (close to 16 cent premium) which seems high for me, but I have seen crazier things.
CLO ETF May 7. I don't have a log with all the specifics like fills and time but it was around 9-10 AM PST.
Deal Addict
May 28, 2006
2389 posts
181 upvotes
Too all those that say use limit order I'll just give one example where I use market order. Momentum.

When you see a stock rising quickly nanoseconds count. Hit buy market order and quickly put in your sale limit for a quick small profit.
Deal Addict
May 28, 2006
2389 posts
181 upvotes
gelato69 wrote: CLO ETF May 7. I don't have a log with all the specifics like fills and time but it was around 9-10 AM PST.
This stock is low volume so it's easy to get wide price discrepency. Also keep in mind odd lots get low priority when filling orders of the same price.

From 12:05 to 12:07 price jumped 9.73 to 9.85 with 300 stock trade. From 12:09 to 1:16 there was no trade.

My guess is someone put a 100 buy order at 9.74 before you and ask was just 100 at 9.74 and the next ask was 9.85 which your order filled.

http://www.stockhouse.com/companies/lev ... -index-etf

Top