Ask, Last, Bid Parameters In Order Types (Market, Limit, Stop)

[monkey0]

Hi,

My question is related to any trading platform and any country's stock market.

3 types of orders exist and two situations so we have 6 combinations:

1. Limit order, buying
2. Limit order, selling
3. Stop order, buying
4. Stop order, selling
5. Market order, buying
6. Market order, selling

So I would like to know which price in which situation/combination do I look at? According to my research the answers should be (note: extreme care when comparing combination id and order type):

1.: Buying is done when price reaches my defined one or below. NOT so called Jumping Near Y Axis (see at the bottom of message for definition of this term) price BUT ASK price. I spent money what I define and this earning is ASK price or price below ASK price. So my defined price is all the time being compared to ASK price. This is completelly against what I have previously learned from here:

http://daytrading.about.com/od/daytradingbasics/a/BidAskLast.htm

Here says ''the lowest price that a trader is willing to pay''. NOT true!!! Order is processed if price reaches the one which is BELOW defined one. But generally I am asking in all those 6 combinations to which price is my defined one compared.

2. Selling is done when price reaches my defined one or above. NOT so called Jumping Near Y Axis price but BID price. I earn what I define and this earning is BID price or price above BID price. So my defined price is all the time being compared to BID price.

3. Two explanations possible, which one is correct?

3.1. This combination (stop order buying) has nothing to do with ASK price. Also nothing to do with BID price. When my defined price (or lower since its buying) reaches the realtime platform market's price in exact microsecond (=Jumping Near Y Axis price), order will be executed BUT (!!!!!!!!) only on FIRST NEXT Jumping Near Y Axis price regardless being higher or lower from defined price.

3.2 My defined price is compared with ASK price. When it is reached (or lower since its buying), the order is executed OR processed (big difference!) according to the Jumping near Y Axis price.

Case 3.2 further has two possibilities:

3.2.1 Is order executes and processed on first next Jumping near Y Axis price? OR,

3.2.2 Is order already processed in the same nanosecond as reaching the ASK price according to 3.2?

4. Two explanations possible, which one is correct?

4.1. This combination (stop order selling) has nothing to do with BID price. Also nothing to do with ASK price. When my defined price (or higher since its selling) reaches the realtime platform market's price in exact microsecond (=Jumping Near Y Axis price), order will be executed BUT (!!!!!!!!) only on FIRST NEXT Jumping Near Y Axis price regardless being higher or lower from defined price.

4.2 My defined price is compared with BID price. When it is reached (or higher since its selling), the order is executed OR processed (big difference!) according to the Jumping near Y Axis price.

Case 4.2 further has two possibilities:

4.2.1 Is order executes and processed on first next Jumping near Y Axis price? OR,

4.2.2 Is order already processed in the same nanosecond as reaching the BID price according to 3.2?

5. AND 6: I have no idea. Here I think neither ASK nor BID price are relevant. They aren't important. Only Jumping near Y Axis price is.

NOTE1: The term ''Jumping Near Y Axis'' price is defined by me as current price on the market if realtime platform. For further explanation what do I mean with this term and examples, see the url link above.

NOTE2: On trustworthy source I have heard a lot of talks about ''LAST'' price. According to my message, your explanation, LAST price means nothing in neither of those 6 combinations. What do I use LAST price for then? In which combination?

So to prevent getting reply I am not asking for, I will ask again. My questions are:

- at which price (market, limit, stop - any platform, any country stocks) do I look at in above 6 combinations? Which at 1.? Which 2.? Which 3.? Which 4.? Which 5.? Which 6.?

- according to which price (ask, last or bid?) do I earn if combination 2., 4. or 6.?

- according to which price (ask, last or bid?) do I spend money if combination 1., 3. or 5.?

 

[monkey0]

so could anyone please answer this?

 

[CanOz]

you have complicated a very simple auction process...i don't even understand the question

 

[tech/a]

you have complicated a very simple auction process...i don't even understand the question

I've re read it and I think I know what he means.
Just haven't had the time to knock up an answer.
But the process is as you say simple.
But as usual humans complicate it!

Ill have a crack a when I have time---probably Wednesday night.

 

[CanOz]

I've re read it and I think I know what he means.
Just haven't had the time to knock up an answer.
But the process is as you say simple.
But as usual humans complicate it!

Ill have a crack a when I have time---probably Wednesday night.

Thanks Tech, i want to have a go it answering but i've just got too much on...trying to get ready for 3 days in Thailand...sun and fresh air!

 

[burglar]

... 3 days in Thailand...sun and fresh air!

Don't wear a red shirt!!

 

[CanOz]

Don't wear a red shirt!!

I've packed neutral colors...thanks burgs..

 

[tech/a]

Thanks Tech, i want to have a go it answering but i've just got too much on...trying to get ready for 3 days in Thailand...sun and fresh air!

Wish I had that sort of too much on.

 

[burglar]

... 3 types of orders exist and two situations so we have 6 combinations: ...

I will try to make a start.

If I want to buy an icecream I need to go to a retail outlet that sells icecream.
So far I am only buying! I don't overcomplicate this transaction!

Your broker knows about the three stops.
Figure out what you want in a stop.
Then ask your broker which stops, if any, meet your needs.

My broker has a trading room with telephone, email or post.
The team is very helpful.

 

[monkey0]

tech/a as you can see in my username, im monkey and not human and we like to complicate things to learn deeper, better and to understand more.

I am asking same questions in third different way and this time I will do my best to be understandable in most possible brief and understandable way:

1. Limit order: here I define the price I want to either sell or buy stocks. When the actual price on market is exactly the same as this defined price, the stocks are sold/bought. If buying and if actual price on market goes below defined one, buying order is executed anyway. If selling and if actual price on market goes above defined one, selling order is executed anyway. What of the following four options is here counted as Actual Price On Market:

- Bid price
- Ask price
- Last price
- price near Y axis which is usually jumping up and down all the time

2. Market order: in both buying/selling is order executed immediately when confirmed/verified. Adding the order does NOT execute buying/selling unless platform doesn't have confirmation/verification window. For which of the following prices are stocks sold/bought:

- Bid price
- Ask price
- Last price
- price near Y axis which is usually jumping up and down all the time

I would say fourth one since there is market price but Im unsure if either bid, ask, or last price is the same as fourth one.

3. Stop order: in both buying/selling case the order is executed once actual price on market is the same as defined price BUT (!!!!!) for the actual price on market which will be FIRST NEXT (no matter if above or below comparing to defined price) from the moment when it reaches my defined one. So selling/buying is done according to FIRST NEXT price. Question: Is what i said about ''FIRST NEXT'' price correct or not? If not, is buying/selling therefore done when actual price on market reaches my defined price? I think not because this way Stop order would be the same as Market order with no difference.

4. What is ''actual price on market'' in third question (in stop order)? Which of the following:

- Bid price
- Ask price
- Last price
- price near Y axis which is usually jumping up and down all the time

Note that knowing the fact I earn what Bid price says and I spent what Ask price says does NOT answer any of those four questions.

 

[burglar]

... Note that knowing the fact I earn what Bid price says and I spent what Ask price says does NOT answer any of those four questions.

My broker does not offer these things of which you speak.
As far as I know, every broker is different.
Therein lays some of your difficulty.

Use the KISS principle.
KISS is an acronym for "Keep it simple, stupid"

 

[skyQuake]

I'll have a crack at this...

tech/a as you can see in my username, im monkey and not human and we like to complicate things to learn deeper, better and to understand more.

I am asking same questions in third different way and this time I will do my best to be understandable in most possible brief and understandable way:

1. Limit order: here I define the price I want to either sell or buy stocks. When the actual price on market is exactly the same as this defined price, the stocks are sold/bought. If buying and if actual price on market goes below defined one, buying order is executed anyway. If selling and if actual price on market goes above defined one, selling order is executed anyway. What of the following four options is here counted as Actual Price On Market:

- Bid price
- Ask price
- Last price
- price near Y axis which is usually jumping up and down all the time

What do you mean by price near Y axis?

Market price is the Last traded price. If an active stock is $1.05 bid and $1.06 ask, you can place a limit at $1.06 or higher for an instant fill. Or at $1.05 and wait for someone to sell stock to get your fill.

2. Market order: in both buying/selling is order executed immediately when confirmed/verified. Adding the order does NOT execute buying/selling unless platform doesn't have confirmation/verification window. For which of the following prices are stocks sold/bought:

- Bid price
- Ask price
- Last price
- price near Y axis which is usually jumping up and down all the time

I would say fourth one since there is market price but Im unsure if either bid, ask, or last price is the same as fourth one.

If you're buying, you're get done at the Ask price. If selling, you'll get done at the Bid price. Your order will create a new "last" price after its executed.

3. Stop order: in both buying/selling case the order is executed once actual price on market is the same as defined price BUT (!!!!!) for the actual price on market which will be FIRST NEXT (no matter if above or below comparing to defined price) from the moment when it reaches my defined one. So selling/buying is done according to FIRST NEXT price. Question: Is what i said about ''FIRST NEXT'' price correct or not? If not, is buying/selling therefore done when actual price on market reaches my defined price? I think not because this way Stop order would be the same as Market order with no difference.

Stop limit: Once the last price = stop price, execute buy/sell order at limit price (may or may not instant fill depending on where your limit is)
stop market: Once the last price = stop price, execute buy/sell order at Market price. (instant fill)

All this is readily available on google, in more detail too

 

[monkey0]

What do you mean by price near Y axis?

http://fousalerts.com/wp-content/uploads/2013/05/speedtrader.png

If you may please carefully look at this chart. You will see the arrow at the top right side (not yet a corner) being directed in the left side. It is impossible to see the number due to bad photo quality.

In following platform this price is shown three times (different stocks):

https://www.interactivebrokers.com/images/common/tradingtech_tws_006.png

All three times obviously in yellow place near Y axis: 1308.25, 131.30, 131.30

So as actual price near Y axis I was referring to the market price at exact time of looking (assuming platform is realtime) or differently said: ''jumping'' price near Y axis.

----------------------------------------
skyQuake thank you for your reply but you didn't understand the first question. I already know what does Last price term mean. If/when you will be available and willing to, if you could read again the same question.

Regarding 2: So the ''jumping'' price has nothing to do with Market order, neither for selling nor buying case? You are saying I should look at Ask price (buying) and Bid price (selling)? I thought I should look at market price and exact market price is for my opinion the jumping price - price near Y axis (example on above links).

Regarding 3: I don't think on platforms (resources from where I am learning) order with name ''stop limit'', ''stop market'' exist. As far as i know there are three order types with EXACT names: ''stop'', ''limit'' and ''market''. I have never heard for term ''stop price'' but i think your term ''last price'' is actually ''my defined price''. Anyway, how about that ''first next'' price I am asking for in STOP order?

and what about:

4. What is ''actual price on market'' in third question (in stop order)? Which of the following:

- Bid price
- Ask price
- Last price
- price near Y axis which is usually jumping up and down all the time

Exluding third question which needs more exact info, I am only asking where exactly to look at (four possibilities: bid price, jumping price as known as price near Y axis, ask price, last price) in described cases.

 

[tech/a]

Frankly after reading this I won't be answering.
Too damned hard.( from the reply to Skyquake )

As Skyquake points out there is more than enough for you
To find on google.
Your platform will have a help desk ---- send them your
Questions.

 

[monkey0]

Frankly after reading this I won't be answering.
Too damned hard.( from the reply to Skyquake )

As Skyquake points out there is more than enough for you
To find on google.
Your platform will have a help desk ---- send them your
Questions.

Why hard? Who else would I need to ask? Different forum?

 

[tech/a]

http://www.nasdaq.com/investing/glossary/

Do some homework.
If you still have questions after reading up then limit them to easy
bullet points.
EG
Why is my order filled below my Specified limit price?

Jumping price needs to be added to this glossary I have provided---

 

[burglar]

Why hard? ...

It is hard because I don't know what you don't know!?

... Who else would I need to ask? ...

As tech/a and I have said, talk to your broker / platform provider

... Different forum?

This is a great forum ... tech/a is one of the best traders here, as is skyquake!

Different forum will give different answer. But no guarantee.

 

[monkey0]

It is hard because I don't know what you don't know!?

Please see post number 13 where I asked in most understandable possible way. If size of the post (13th one above) is large for YOUR opinion, let this don't confuse you.

 

[tech/a]

Please see post number 13 where I asked in most understandable possible way. If size of the post (13th one above) is large for YOUR opinion, let this don't confuse you.

define jumping Price?

Is it orders moving through the bid/ask and your seeing this price jump around where as the chart price isn't exactly the same?

By the way the IB charts aren't all different.
you have 2 time frames for SPY.

Your concern seems to be that you cant define a price due to this jumping so cant determine what order to place and what fill you'll get?

Am I close?
If not please re phrase your question.
So we know what it is your really asking?

 

[monkey0]

define jumping Price?

With term Jumping Price I was referring to the currect exact price on the market assuming that platform (e.g. speedtrader) is realtime and it is being refreshed in microseconds. This price is the one near Y axis on all trading platform charts. There is only one (so you cannot overlook it) price near Y axis and i called it as Jumping Price. It is usually changing all the time. It is NOT (!!!) in Making Order window but I repeat (although sne of 3 prices i am asking for might be the same), it is on the charts - near Y axis.

In the post number 13 in this topic, where I did my best to be as much as possible understandable, I was asking only (excluding third query) at which price out of four possibilities (price near Y axis as known as ''Jumping Price'', last price, bid price, ask price) do I LOOK AT when doing specific order out of three possible ones: stop order, limit order, market order. I know definitions of those four prices but this doesn't yet mean I know the answer on just repeated question: at which price out of four do I look at for each (out of 3) type or order? I for sure look at the same price (out of 4) in both buying and selling case but in order types I look at different prices: At which one for stop order? At which one for limit order? At which one for market order? I repeat, once again, I am only asking AT WHICH PRICE TO LOOK AT for said three cases. I look at the same one when buying or selling, it is only different based on order type. I never asked about price definitions.

For third query: Here I only wanted to make sure if my understanding of Stop order is correct. I define the price for selling/buying but I don't earn (if sell) or spent (if buy) based on this defined, my own chosen, price if reached. I know the price MUST be reached exactly. According to what I have learned is: If the current price on market (Jumping Price) goes below that defined price or above it, the order is NOT executed as it would be in Limit order. But this has nothing to do with my question. What I am asking is completely different: In Stop order what exactly happens when current price on market reaches (gets the same) my defined price? What happens in this moment in Stop order? Is order executed based on first next price (no matter if above or below defined one) on the market (option1) OR based on the current price on the market in exact nanosecond comparing to the time when my define prices reaches this price on the market (option2)? It could be possible, although I doubt that, option3 exist too. However on all resources I am learning from, I get only option1 and option2 definitions for Stop order but for beginner like me, they are so similar that I need to ask to get an answer. I don't manage to figure out based on given explanations of Stop orders. Please answer what I am asking, don't just explain what Stop order is. There are already countless of explanations.

I apologize for posting on your forum with such stupid questions but Im sure everyone was at the beginning of trading career on the step where I am now.