Is it possible to buy or sell highler/lower than current market price?

[superprogrammer]

Thanks everybody for your replies.

What I now think is that, to understand exactly how markup/markdown is done, we may need to understand the order execution algorithm.

For ex: How is the Last Trade Price(LTP) decided. I am not sure of it, but I think it is the price at which max. no. of shares would be transacted. Suppose the exchange has received orders to buy 100 shares @ 25, 400@ 25.6, [email protected], the LTP will be 25.6 because it clears max amount of order book as compared to other two orders. This thinking of mine is also supported by the fact that to make a big move, big volumes(orders) are necessary. If big orders were not necessary, the intraday high-low values could be easily manipulated by any person. For instance a person may be willing to sell one equity share or RELIANCE at Re. 1. Does that mean exchange will show Re. 1 as low price? Not at all!

True
I also use to wonder the same thing

<<
For instance a person may be willing to sell one equity share or RELIANCE at Re. 1. Does that mean exchange will show Re. 1 as low price? Not at all>>
If this was true, then all you have to do is sell 10 shares at Rs 1 and every trader stop loss would be triggerd :lol:
But the question is, lets stay for one stock LTP is Rs 200 and average SL is 180, if I start selling 500 shares at 160 and it happens to be highest volume at that time, does that means stock price would come down to 160 and everyone will hit their stop loss first before my sell order is executed?

 

[chachi]

Hi bunny,

Your quest for volume & price analysis is incredible. It is driving more energy in me to analyse the market in a different perspective.

During market hours go to the link.......

http://www.nseindia.com/marketinfo/...ey=UNITECHEQN&symbol=UNITECH&flag=0&series=EQ

(I know you might have visited the above URL many a times)

The display lists the details of trading for UNITECH. Watch the figures under "Order Book". First five "best ask rates" and "best bid rates" are being shown. Watch the figures regularly by refreshing, and notice how the price dances due to the change in size of Orders and No. of Orders.

Unfortunately the above window of nse refreshes slowly. If you are using geojit - platinum [of course I have only silver platform of geojit - which shows the changes in every second] or some other traders platform, you can notice the changes in price & volume for any particular scrip in realtime.

It is so intriguing that, I spend hours noticing these changes.

Regards
Chachi

 

[harshatmehta]

Trading System - Order Matching Rules
The best buy order is matched with the best sell order.

Source: http://www.nseindia.com/content/equities/eq_orderrules.htm

 

[Capricorn]

i am a n00b myself, so please dont think this answer is in any way correct.

theoretically, it SHOULD be possible to buy/sell at a price different from CMP. because the exchange only matches buyers and sellers who are quoting the same price.

for instance, stock A is trading at rs 10. but i am willing to sell it for rs 8 (lets also assume im an insider and i know the company is going to tank ). if you are in the market to buy, and you enter your order to buy as rs 8, the exchange might match our orders.

purely conjecture. any experienced people are welcome to correct me.

No , your order would be executed at best bid available at that time.

 

[hsn22]

ok, so i did some reading up on the nse website (under the ncfm study material) and this is what i have gathered.

the exchange follows a best price mechanism. when you place a market order to buy, it tries to find a seller who is offering the least. when you place a market order to sell, it tries to find a bidder who is willing to pay the most.

therefore, if someone were to place a sell order for even rs 1, and at that exact moment, somebody else places an order to buy, the exchange will match them.

ofcourse, this is still only theoretical and i am in no mood to try selling anything for rs 1
my last post was conjecture, this is informed guessing lol.

 

[ankit909]

Hi guys,
Its is possible to sell shares for lower than CMP, or buy shares for higher than CMP? Common sense tells me its should be possible, but just want somebody to confirm. I am asking this to understand the concept of markup and markdown.

Thanks,
-Bunny.

i am new to all this .....and there are many masters n seniors HERE but just like to share my views to this topic.....may be some one will be benefited or i'll be benefited from my own mistake...

according to me LTP---- IS LAST TRADED PRICE----PRICE AT WHICH LAST TRADE TOOK PLACE....THIS PRICE IS THE PRICE WHICH LAST BUYER AND SELLER AGREED TO TRADE ...

AND IF I WANT TO SELL(LOWER) AND BUY(HIGHER) than market price ,its possible coz i will be offering lowest price among seller and similarly i'll be offering highest price among buyers ........so there are many chances that ur trade as a seller or buyer will be executed....but ur price has to be match
accordingly. and i think exchanges have some rules regarding "quoting large price difference than market price"

plz do correct me ....thanks in advance

 

[SavantGarde]

Hi Bunny,

Short Answer Is..."YES"

It Can Be Done From Any Terminal

You Guys Have Been Breaking Your Head Eating Up 2 Pages...For This

Happy & Safer Trading

SavantGarde

 

[bunny]

^
If that is true, why come we don't see any such order in the Level 2 market data?
All the selling orders are equal/above the ask price, and all the buying orders are equal/below the LTP.

Also, if this is possible as you say, then every stock is susceptible to continuous price manipulation.

 

[SavantGarde]

If The Order Is Not Placed Correctly It Will Still Not Reflect Because Anything Lower Than Current Bid Would Be Executed As Market Order...Just Being Able To Watch 5 Bid & Ask Is No Level....... Forget About It Being Level-II

One Has To Follow The Same Procedure As When One Is Putting A S/L Order..... Therefore, Trigger Price For Executing An Order Needs To Be In Place.

SavantGarde

 

[bunny]

If The Order Is Not Placed Correctly It Will Still Not Reflect Because Anything Lower Than Current Bid Would Be Executed As Market Order...Just Being Able To Watch 5 Bid & Ask Is No Level....... Forget About It Being Level-II

One Has To Follow The Same Procedure As When One Is Putting A S/L Order..... Therefore, Trigger Price For Executing An Order Needs To Be In Place.

SavantGarde

Is the Level 2 different on Indian systems? I read that from About.com article and I think it was specific to the US markets.

My thinking is that the exchange automatically rejects all such orders. Or perhaps, it keeps then in queue, does not show on the order book unless they become the best 5 prices.