HK Market Order

A market order is an order to buy or sell a security at the market's current best available price. Market order occurs when you provide instruction to Longbridge to execute a trade (buy or sell) immediately at the market price. It does not guarantee a specified price, and the investor cannot control the done price of the order.

1. Is there anything I need to pay special attention to when placing a market order?

1) A market order is executed immediately at the market price, so it is possible for the order to be executed separately at different quantities/prices. The following are the queues for three bid-ask spreads for a security.

If you buy 5000 shares with a market order, the final trade result will be 2000 shares @ $3.88, 3000 shares @ $3.89.
If you sell 5000 shares with a market order, the final trade result will be 1000 shares @ $3.87, 2000 shares @ $3.86, 2000 shares @ $3.85.

2) If the liquidity of an individual security is insufficient or there is no bid/ask, the order may not be executed in full or may not be executed at all, and the part not executed or the entire order will be automatically canceled.

3) You have no control over the price at which market orders are executed. When the market opens in the morning/noon, the done price may deviate due to the need to process orders hoarded before the market opens. Among them, off-market orders are more unpredictable.

4) The market order will lock the buying power at the current price * 1.2 market order multiplier, which may be adjusted according to market conditions. When the order is executed or canceled, part of the buying power (in addition to the transaction amount) will be released.

2. Under what circumstances will a market order be rejected?

In case of volatile market conditions, there is a chance that the market order cannot be matched in time and canceled due to the best bid/ask price fluctuating by more than 5 spreads before it is successfully sent to the exchange, or the order may not be accepted/executed due to other special circumstances (insufficient liquidity).

Therefore, we recommend that you log in to the Longbridge App > "Portfolio" > " Past Orders" to check the execution status after submitting your order.

Key takeaways:

• Core features
  • It is executed immediately at the current market price, but the final fill price is not guaranteed.
  • It may be filled as multiple transactions at different prices/quantities.
  • Any unfilled portion of the order will be automatically canceled.
• Major risks
  • When liquidity is insufficient, some or all of the order may not be filled.
  • Significant price deviations may occur during the market opening due to order backlogs.

Disclosures

This article is for reference only and does not constitute any investment advice.