Selling on limit order?

Question

Let's say I own stock XYZ and it's 10:00am Monday morning. Stock XYZ trades at $36.50 a share as of 10:00am. I want to sell it that same day at $37.00 a share. So, I set a limit order to sell XYZ at $37.00 for the duration of the day.

Let's say the stock does not go to $37.00 until 3pm. How quickly does my online broker (TD-Ameritrade for example) make that deal? Or is the limit order simply waiting in the queue for 5 hours and gets processed immediately once that stock hits $37.00 at 3pm?

Obviously, if the stock never hits $37.00, the deal won't be made. But I want to understand how well an online broker executes this type of order?

Answer 1

The industry standard for for completing a trade is 30 seconds.  Although on relatively high volume days it may take seconds longer.

Answer 2

Immediately

Answer 3

Ameritrade will execute your order the instant there is a bidder willing to pay your limit price. In fact, they will sell your shares with partial fills unless you specify "all or none". So if you're trying to sell 1000 shares, and a bidder only wants 500, those 500 will sell as soon as the bidder reaches your price. The other 500 will sell (with no additional commission from Ameritrade) as soon as another bidder reaches your price that same day. If no one else bids your $37, you will end up with a partial fill of 500 shares.

Your terminology may indicate a minor misunderstanding. A stock does not "hit" a price. At any given moment, a stock has a "bid" and an "ask" price. You are asking $37 and you need a bidder at $37. Just because the "last sale" price was $37 doesn't mean your order will execute if there aren't any more bidders at that price. (A limit order does NOT convert to a market order.) Somebody else's order may have sold at $37 before yours.

Answer 4

I use TD Ameritrade. The trades are processed quickly, in less than 1 second. Your trade would be processed immediately, assuming someone wants to buy your 100 shares.

Answer 5

When the limit price is hit your order becomes a "market" order. Depending on the trading volume at that time the stock will sell in a split second or wait till there's a buyer if there's low liquidity). Be very careful with stops & limit orders with stocks that have low volume.

Answer 6

The order sits in "the book".  If a trade occurs at 37.00, then your order is entered at the end of the queue as a market order and gets filled at whatever is being bid when it gets to the top.  For a highly liquid stock, this will be close to 37.00.  For thinly traded stock, who knows.  It depends on what else is out there.

Answer 7

When you enter a limit order away from the market, for the most part it will be routed to the appropriate post and be left of the specialist/market makers book.

This order will stack or remain on the file until the price hits the limit and it will be executed.  This is all done systemically

Orders are very seldom left in queue, it not good business practice, so the brokerage firms routes them on.

If the stock sells at 3:00, your firm doesn't "make the deal" the trade is done systemically, and a report kicks back to your firm, no later than 3.02.  Your firm not later than 3:04 kicks out a confirmation along with the posting of the trade to the various books and records.  The order was taken off your firm's open order file at 3:02 when notice of the trade was reported.

At the end of the day if the stock does not hit you limit, AND the order is not marked GTC, it is sent back to the brokerage firm with the notation "nothing done", and in most firms this will trigger it coming off you brokers "open order file"

All brokerage firms, enter and execute the same way, on-line is just for the customers, not for really for routing.

Orders are entered the same way after going through edits depending on how they were entered. The orders are routed to either specialist or market makers depending on where the order is to be executed. (It may remain in house since the firm may be a market maker),

No order just lays in queue waiting for the market or for someone to do something manually.