Does price have to trade "through" my Buy Limit Order to get filled or can it get filled if the market just touches it and trades there?

ie. Lets assume that CL is trading 45.55 and I want to buy the market when it pulls back to 45.45. So I place a Buy Limit Order at 45.45. Price finally reaches 45.45 but it only touches and trades at 45.45. Will I get filled? Or will price have go through 45.45 and trade at 45.44 to trigger the trade?

Hope that made sense...

Thank you in advance for whoever helps!

TradeAction 

Does price have to trade "through" my Buy Limit Order to get filled or can it get filled if the market just touches it and trades their? ie. Lets assume that CL is trading 45.55 and I want to buy the market when it pulls back to 45.45. So I place a Buy Limit Order at 45.45. Price finally reaches 45.45 but it only touches and trades at 45.45. Will I get filled? Or will price have go through 45.45 and trade at 45.44 to trigger the trade? Hope that made sense... Thank you in advance for whoever helps!

hi TradeAction

You seem to confuse "market order" and "limit order".

A market order guarantees you entry in the market but you are not guaranteed at what price. If you want to 'buy the market' as specified above you can't buy for sure at 45.45. You buy at market and you get what the best offer is at the moment.

A limit order, on the other hand, guarantees that you will pay the price you identified (or, in some occasions, a better price for you), but it does not guarantee that you will be filled.


So in your example above, if you place a Buy Limit order at 45.45 and the market goes down there, whether you will get filled or not depends on how many Buy Limit orders are in the queue before you. Say you're last in a queue of 10 contracts and the market trades there but only 2 contracts are sold off and price retraces up, you won't get filled.

If, on the other hand, price does go through and starts trading 1 tick lower than your Buy Limit order (in your hypothetical case price would have to trade at 45.44), then in that case it doesn't matter which position you are in the queue, you will have been filled.


Hope this helps.

xplorer 

hi TradeAction You seem to confuse "market order" and "limit order". A market order guarantees you entry in the market but you are not guaranteed at what price. If you want to 'buy the market' as specified above you can't buy for sure at 45.45. You buy at market and you get what the best offer is at the moment. A limit order, on the other hand, guarantees that you will pay the price you identified (or, in some occasions, a better price for you), but it does not guarantee that you will be filled. So in your example above, if you place a Buy Limit order at 45.45 and the market goes down there, whether you will get filled or not depends on how many Buy Limit orders are in the queue before you. Say you're last in a queue of 10 contracts and the market trades there but only 2 contracts are sold off and price retraces up, you won't get filled. If, on the other hand, price does go through and starts trading 1 tick lower than your Buy Limit order (in your hypothetical case price would have to trade at 45.44), then in that case it doesn't matter which position you are in the queue, you will have been filled. Hope this helps.

Ok! Thanks for helping me out with this one. I really needed some clarification on this and now it finally makes sense.

So it looks like its more of a first come first serve situation with Limit Orders.

And if the market trades lower than the Buy Limit the order will be filled regardless of where I am in "line" or queue.

Thanks again for the clarification.

TradeAction 

Ok! Thanks for helping me out with this one. I really needed some clarification on this and now it finally makes sense. So it looks like its more of a first come first serve situation with Limit Orders. And if the market trades lower than the Buy Limit the order will be filled regardless of where I am in "line" or queue. Thanks again for the clarification.

Yes, it is a case of first come first served.

If the market trades lower it simply means that all the limit orders at the level you had placed yours get scooped up (including yours obviously).