Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.1 6/24/83; site trwrba.UUCP Path: utzoo!watmath!clyde!burl!ulysses!mhuxr!mhuxb!mhuxn!mhuxm!mhuxj!houxm!vax135!cornell!uw-beaver!tektronix!decvax!ittvax!dcdwest!sdcsvax!sdcrdcf!trwrb!trwrba!suhre From: suhre@trwrba.UUCP (Maurice E. Suhre) Newsgroups: net.invest Subject: Re: Limit Orders Message-ID: <1274@trwrba.UUCP> Date: Thu, 7-Feb-85 17:54:15 EST Article-I.D.: trwrba.1274 Posted: Thu Feb 7 17:54:15 1985 Date-Received: Wed, 13-Feb-85 02:38:57 EST References: <3754@ucla-cs.ARPA> Organization: TRW EDS, Redondo Beach, CA Lines: 34 I understand limit orders on the sell side to mean that when the limit (i.e. stop) price is reached, the order becomes a *market* order. The stock may fall farther before the buyers finally catch up with the sellers. That is, your order may actually be executed *below* your stop loss price. Those who believe that the specialist system is rigged in favor of the specialists (they are either paranoid, cynical, or accurate) suggest that limit orders tell the specialist where the gold is buried. On the other hand, if you are trying to pick up a stock or option a little cheaper than the usual trading range, you have a chance at it by entering a limit order. I would suggest that these be either day trades (good only for the current day) or else you monitor them closely. The specialist does not collect a fee for each transaction, but rather makes his money on the spread between the bid and asked prices. Finally, the use of limits on odd lot trades is different. When a round lot trades at the limit price, the odd lot broker is required to execute all odd lot limit trades waiting at the same price. Don't forget that the odd lot broker gets 1/8 for his troubles. And you generally pay a higher comission for odd lots. All in all, this mess is not a simple matter! (Usual disclaimers about not being a registered investment adviser, etc.) Maurice {decvax,sdcrdcf,hplabs,ucbvax}!trwrb!suhre