Catastrophic event

going back to the too examples of limit and market orders (about cable, and the gap and stuff), can you say whats wrong with them?
 
ok, let's try a different approach.
you have a GTC limit order to buy a currency future contract at 1.5860 and the market closed today above that price so no fill yet. Tomorrow the market opens gap down at 1.5820. What price did you get filled at?

Peter
 
DashRiprock said:
assuming its a milit buy order working in the book (a limit sell @ /60 would immediately be filled @ /80), a fill at /60 is the correct price, and you should be long @ /60 with 1.5820 last.
Click to expand...

I was talking about IG.

Time: 15:00:00. GBPUSD trading 1.5880
Time: 15:00:01. GBPUSD trading 1.5820
Brettus leaves buy order for £20 at 1.5860(limit order). Filled at 1.5860.
Brettus leaves sell order for £20 at 1.5860(stop order). Filled at 1.5820.

IG leaves buy order in market for £20 equivalent(300k GBPUSD ish) at 1.5860. Filled 1.5820.
IG leaves sell order in market for £20 equivalent(300k GBPUSD ish) at 1.5860. Filled 1.5820.

Should i not be filled at 1.5820 given that the market gapped down and they got filled at the better price??
If you look at that example, i have lost 40 ticks on £20. £800 and IG have lost nothing except some comms.
 
wackypete2 said:
ok, let's try a different approach.
you have a GTC limit order to buy a currency future contract at 1.5860 and the market closed today above that price so no fill yet. Tomorrow the market opens gap down at 1.5820. What price did you get filled at?

Peter
Click to expand...

thats not what were talkin about here anyway because you are saying the market is closed. i am talkin about when the market is open and there is a gap because of a catastrophic event like the thread.

(btw I have no idea, there is probably some matching algo that goes on pre-open or something. I never leave orders in like that anyway. maybe the open is set by the DMMs i dunno.)
 
ok so the market remains open, its mid day. last price is 1.5890...the very next print gaps down to 1.5820. What price did u get filled?

It's irrelevant if the market is open or closed between prints...a gap is a gap. If you have no idea what price you'd get filled at then you are not understanding. No disrespect but you are not getting what we are trying to say.

Peter
 
brettus said:
I was talking about IG.

Time: 15:00:00. GBPUSD trading 1.5880
Time: 15:00:01. GBPUSD trading 1.5820
Brettus leaves buy order for £20 at 1.5860(limit order). Filled at 1.5860.
Brettus leaves sell order for £20 at 1.5860(stop order). Filled at 1.5820.

IG leaves buy order in market for £20 equivalent(300k GBPUSD ish) at 1.5860. Filled 1.5820.
IG leaves sell order in market for £20 equivalent(300k GBPUSD ish) at 1.5860. Filled 1.5820.

Should i not be filled at 1.5820 given that the market gapped down and they got filled at the better price??
If you look at that example, i have lost 40 ticks on £20. £800 and IG have lost nothing except some comms.
Click to expand...

IG made the 40 ticks you lost. IG sold to you from their account @ 1.5860 then they bought at gap price of 1.5820 to cover themselves = +40 ticks to IG. if you are trading futures then you would get filled at 1.5820, forex, no. Just doesn't work that way in non exchange traded markets.

Peter
 
wackypete2 said:
IG made the 40 ticks you lost. IG sold to you from their account @ 1.5860 then they bought at gap price of 1.5820 to cover themselves = +40 ticks to IG. if you are trading futures then you would get filled at 1.5820, forex, no. Just doesn't work that way in non exchange traded markets.

Peter
Click to expand...

Yea. Whatever i lose they make. Forgot to make that point. But even if i traded in the futures with them, it would be the same problem. They will still screw me.
So i guess 60 did trade. Still doesn't make it fair though. I could argue that with my stop i sold at 1.5860 to them and they covered it at 1.5820, but it doesn't work that way.
 
brettus said:
Yea. Whatever i lose they make. Forgot to make that point. But even if i traded in the futures with them, it would be the same problem. They will still screw me.
Click to expand...

Thats because they are a spread betting firm and not a true futures broker, I believe. I could be wrong on that...

Peter
 
brettus said:
I could argue that with my stop i sold at 1.5860 to them and they covered it at 1.5820, but it doesn't work that way.
Click to expand...

All they will tell you is "you had a limit order to buy and you got filled at the price you wanted, what's the problem??"

Flawed at best.

Peter
 
brettus said:
I was talking about IG.

Time: 15:00:00. GBPUSD trading 1.5880
Time: 15:00:01. GBPUSD trading 1.5820
Brettus leaves buy order for £20 at 1.5860(limit order). Filled at 1.5860.
Brettus leaves sell order for £20 at 1.5860(stop order). Filled at 1.5820.

IG leaves buy order in market for £20 equivalent(300k GBPUSD ish) at 1.5860. Filled 1.5820.
IG leaves sell order in market for £20 equivalent(300k GBPUSD ish) at 1.5860. Filled 1.5820.

Should i not be filled at 1.5820 given that the market gapped down and they got filled at the better price??
If you look at that example, i have lost 40 ticks on £20. £800 and IG have lost nothing except some comms.
Click to expand...

Ok so this is with a Sb company which makes it a bit different, maybe alot but maybe not enough to make any difference, it depends on the t and c's. let me explain what would happen in a double sided auction where you can make and take prices.

its /80 last, and you are working a bid at /60 - this is your limit order

something happens and all the bids from 80 to 61 dissappear OR someone takes them all out.

you are now the best bid in the market and "on top of the book" with your bid @ /60

unless:
1. your bidding for enough to halt the market from falling, or
2. other algo's see your bid and create their bids/offerd from it

then you get given @60 and the next best bid is at /20

so thets where the market next trades.

so you are long @ 60 with /20 last. this is what would happen in futures and stocks and ecn spot forex.

Again for a Stop sell @ /60...

once /60 is either quoted or traded (depends on the specifics of the order), your sell @ mkt order is sent and you get some of the /60's if you are lucky but porbably you get the /20's.

you would prolly get a fine too for trying to trade with yourself (why are you working two different orders at the same price?)





now an important bit is whether your limit is a genuine limit and if anyone else can see it to trade on and stuff like that. in this case if you think you should get a fill at /20 then buy @ mkt stop order @ /60 (r wherever) is the "proper" order type if you were market facing.
 
wackypete2 said:
ok so the market remains open, its mid day. last price is 1.5890...the very next print gaps down to 1.5820. What price did u get filled?

It's irrelevant if the market is open or closed between prints...a gap is a gap. If you have no idea what price you'd get filled at then you are not understanding. No disrespect but you are not getting what we are trying to say.

Peter
Click to expand...

hi mate :)

its good that you think i dont get it cos i think the same about you :D
this way we dont need to flame or hate we can just talk about it normally (y)

so doing this trade with a spreadbetter is a bit different because a limit order might not actually be a proper limit order that is working in the book and other people can see it.

as much as i know this is how sport forex is traded through like reuters and EBS and maybe deutchebanks think whatever it is (its motorway in german i think). you can work bids and offers as well have orders that are contingent on prices/quotes/other orders whatever. maybe not everyone can see the prices you are making because of credit lines but if they are right out i guess someone will arb them back into line quickly. there are other ways to trade like this like currenex or ducascopy i think, and if your trading 3 lots you can probably make prices as well but im not an expert on all the different ones so ask around.

but bottom line is apart from differnces in matching algo's all venues work like i said in my writing before this one, for all of the exchanges in the world and as well the forex ecns.
 
wackypete2 said:
IG made the 40 ticks you lost. IG sold to you from their account @ 1.5860 then they bought at gap price of 1.5820 to cover themselves = +40 ticks to IG. if you are trading futures then you would get filled at 1.5820, forex, no. Just doesn't work that way in non exchange traded markets.

Peter
Click to expand...

this is a bit wrong.

you did buy at /60 and sell at /20, but they are the orders that you sent to the market.

if you were trading futures the exact same thing would of happened.
 
DashRiprock said:
Ok so this is with a Sb company which makes it a bit different, maybe alot but maybe not enough to make any difference, it depends on the t and c's. let me explain what would happen in a double sided auction where you can make and take prices.

its /80 last, and you are working a bid at /60 - this is your limit order

something happens and all the bids from 80 to 61 dissappear OR someone takes them all out.

you are now the best bid in the market and "on top of the book" with your bid @ /60

unless:
1. your bidding for enough to halt the market from falling, or
2. other algo's see your bid and create their bids/offerd from it

then you get given @60 and the next best bid is at /20

so thets where the market next trades.

so you are long @ 60 with /20 last. this is what would happen in futures and stocks and ecn spot forex.

Again for a Stop sell @ /60...

once /60 is either quoted or traded (depends on the specifics of the order), your sell @ mkt order is sent and you get some of the /60's if you are lucky but porbably you get the /20's.

you would prolly get a fine too for trying to trade with yourself (why are you working two different orders at the same price?)





now an important bit is whether your limit is a genuine limit and if anyone else can see it to trade on and stuff like that. in this case if you think you should get a fill at /20 then buy @ mkt stop order @ /60 (r wherever) is the "proper" order type if you were market facing.
Click to expand...

Thanks. I trade the real market too so i know how it works. Actually what happens most of the time and the reason why the market gaps is because the liquidity completely disappears, well it does in the spot market anyway, then gradually bids and offers come back in, and because the banks are price makers instead of takers, you will be filled at the best offer or bid. Boom!
 
DashRiprock said:
this is a bit wrong.

you did buy at /60 and sell at /20, but they are the orders that you sent to the market.

if you were trading futures the exact same thing would of happened.
Click to expand...

But if the price is 44 at 45, and i bid 50, i get filled at 45, not 50.
 
What's the daily dollar amount difference between spot and future Forex brokers.
IE Oanda VS Fxcm?
 
If one can trade spot with more volume and no gaps, why trade futures with known gaps at the open?
 
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