Personal Finance & Money Asked by Guybrush Threepwood on July 22, 2021
Earlier today I decided to place a Limit Buy order for some stock for a target price somewhere in the middle of the Ask-Bid spread. Since the price of my order was higher than the Bid, I would have expected my price to become the new Bid price, which however was not the case.
Moreover, in the hours that followed the stock’s price went down, which means that trades were made at a price lower than my Limit Buy. How come my order did not execute?
On US stock exchanges, odd lots do not affect the price or the volume size of the NBBO quote. So if you order was for less than 100 shares, you'd see no change in the quote.
If you buy limit order was equal to or greater than the ask price then you should have gotten a fill. However, if it was less than the ask, you could see trades occurring at a lower price without a fill.
For example, XYZ is $50.00 x $50.30 and you place an order to buy at $50.05. XYZ could slowly drop to $49.80 x $50.10 and you could see lots of trades from $50.30 to $49.80. However, the ask price never reached your order's limit price so there was no trade execution.
Answered by Bob Baerker on July 22, 2021
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