I placed an order to sell a position yesterday before the extended hours the market is open today. Durring the day the stock is selling higher than my ask price but my position remains unsold. Why is this?
@Sterling Was this in paper or live trading? Do you have the order number? I can do some checking.
Thank you for the response. The symbol was MLPO with a live order number
At 9:43 MST I noticed the market report selling above the ask price but the order wasn’t sold.
It sold later at with number
Does it sell but only show as being sold after along delay sometimes?
Thank you for looking at this
@Sterling The order you were questioning was de9c67e7-2739-4616-be68-f7556f2e0dc1, a day order to sell 2 shares of MLPO at a limit (ie the minimum) of $14.11 placed on Sep 28. This is actually a great example of how/why orders fill because the symbol MLPO had so few trades. Thank you for highlighting it.
So, some basics on quotes and how orders typically fill. The National Best Bid Offer (NBBO) quotes are the highest bid and lowest ask orders which are ‘displayed’ across all execution venues (typically exchanges). These are simply limit orders (typically) which someone has placed. A buy limit order becomes a ‘bid’ and a sell limit order becomes an ‘ask’. The buy limit price (bid) is the most that buyer is willing to buy for, and the sell limit price (ask) is the least that seller is will to sell for. A sell market order will typically fill at the bid and a buy market order at the ask. There can though be times where there is ‘price improvement’ and an order will fill better than these.
Below is a chart showing the bid and ask prices for MLPO throughout the day. The upper blue line are the asks and the lower green line are the bids. The dashed orange line is the limit price for the order in question submitted just before markets opened. The limit price is the lowest price one was willing to sell for. The circles are actual trades. Normally there would be thousands of trades but this specific stock only had 20 trades the entire day which makes it much clearer to visualize what’s going on.
The first thing to note is, up until the order filled at 12:53, the bid price (in green) was always lower than the limit price. In other words, the maximum anyone was willing to pay was lower than the minimum you were willing to sell for. Then, at 12:53 the bid price jumped which is when the order filled.
A second thing to note is most of the orders filled at either the bid or ask prices. Typically a market sell order will fill at the bid which are the red dots on the green line. A market buy order will fill at the ask which are the red dots on the blue line. There are 4 orders which filled what appears to be midway between the bid and ask (it looks like 3 but there are 2 orders at 12:43). There can be many reasons why orders fill at prices other than the bid or ask. One reason is some brokers offer a “Pegged to Midpoint” order type. The broker (for a fee) will try to execute the order at the bid-ask midpoint. That almost appears what these orders could be?
So, to sum things up, it looks like this order filled correctly at the current bid price. One cannot simply look at other fill prices (ie ‘current price’ ) to determine if an order will fill. The only thing which determines if an order will fill is the current NBBO quote.