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In a message dated 12/30/1999 11:20:30 AM Central Standard Time,
fritz@xxxxxxxx writes:
<< Hello John,
That being the case, why would anyone ever use a synthetic "market"
order on the mini's? You could enter a limit 5, 50, or 500 points away
from the last price, and you're still guaranteed to get the best fill
when you get to the front of the queue -- right? That way you don't
have to worry about how your particular FCM treats market orders, and
you don't have the danger of missing the fill, as can happen with a
market order.
So why EVER use a "market" order?
Gary >>
***** Good question. Mostly because it is an automatic function. For
example, if the market is trading at 1485.00 and you put in a two point limit
order above to buy the market at 1487.00 or better. What if the market jumps
to 1488.00 by the time your order hits Globex2. You are not filled, but
rather have a limit order working at 1487.00. With a market order going
through the Order Management Stops Server, your limit order is automatically
adjusted to 2 points higher than the last price automatically, no matter what
that price. So, if by the time your order gets in the market just traded
1488.00, you will have a limit order at 1490.00 and have a greater chance of
being filled.
******* I think that because of the arbitrage with the Big S&P and the
popularity of the E-mini S&P that the synthetic markets work just fine.
******* In normal market conditions this works fine. In volatile market
conditions, you should use limit orders. I am a firm believer in giving
people choice. However, with some of these choices there is a need for
education about the subtleties.
Regards,
John J. Lothian
Disclosure: Futures trading involves financial risk, lots of it!
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