Limit and Stop order executed at Ask or Bid price.

[cree125]

Are sell limit orders executed at the Ask price or the Bid price?

Are sell stop orders executed at the Ask price or the Bid price?

[NinjaTrader_Jason]

Hello cree125,

Sell orders are executed at the bid price. Buy orders are executed at the ask price.

[cree125]

If I place a sell limit order shouldn't it be filled when the ask price reaches the limit order?
From my understanding a market order will fill my limit order at the ask price of the limit order.

[NinjaTrader_Jason]

No, sell orders execute as per the bid price, not the ask price.

I think you refer to stop market orders and not limit orders. If you submit a stop market order, it will submit a market order when the market reaches the order price. Sell market orders execute at the bid price, but market orders execute at the ask price.

[cree125]

So if I place a market buy order it will execute at the current ask price. But doesn't this also mean a limit sell order is also being executed at the current ask price as well.

[NinjaTrader_Jason]

No, a buy limit order would execute at the ask price. A sell limit order executes at the bid price.

[cree125]

If I'm looking at the DOM and there are 10 orders at the ask price of 1.10 and I place a market buy order, I buy 1 contract from a seller. Two orders are executed, both at the ask price. One of them is my market buy order and the other is someone else's sell limit order. Am I wrong about this?

[NinjaTrader_Jason]

I do not know what order type would be used for the execution other than yours. I do not see how you could check this. However your buy market order will execute at the ask price.

[cree125]

Looking at the DOM; orders resting on the DOM are limit orders waiting to be filled, is this correct?

[NinjaTrader_Jason]

I assume you refer to orders you submitted yourself in the SuperDOM.

Limit orders show "LMT"

Stop market orders show "STP"

Stop limit orders show "SLM"

[cree125]

I was referring to the level II depth that I see when looking at the DOM.

[NinjaTrader_Jason]

I do not see how you can determine the order types as per the level II depth shown in the SuperDOM.

[cree125]

Okay thank you for your help. I still don't seem to have found the answer to my question. Every trade is a buy and a sell. If my market buy order is getting executed at the ask, then what type of sell order is consuming my market buy order at the ask? It must be a sell limit order?

[NinjaTrader_Jason]

Unfortunately I am not sure and I am not aware of a way to determine this from within the NinjaTrader platform.

[koganam]

I do not see how you can determine the order types as per the level II depth shown in the SuperDOM.

Unexecuted orders on the DOM are Limit Orders yes. Your own orders will still execute as outlined in the thread. Sell at bid, buy at ask. It is why we advise you not to trade illiquid instruments, because you will always have to overcome the bid/ask spread in order to make money.