Thursday, March 6, 2008

Question: Market VS Limt Orders???

All i have to say is it depends...When i trade something that's thinner in nature or with a wide spread between bid and the ask, (i.e. SRS, SKF, FXP, ISRG, MA, FSLR), then i will always enter/exit using limit orders and going into these names with market orders is literally like handing your money to the market makers and saying "please screw me now!" You always get shitty execution and you will enter a losing trade right away. For stocks that are very liquid like AAPl, RIMM, CSCO, etc, i would enter using market orders as the spreads are usually pretty close and you won't be 'screwed'. But I pretty much always enter and exit using limit orders. Enter/Exit at your own terms NOT the Market Maker's terms.

1 comment:

capitalistic said...

good call stewie, this post helps me alot! i got screwed the other day on a trade on a thin stock with a market order... dumb :)


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