Are stock trades instantaneous with online brokerages?
mateo500 asked:
I’m a beginner and I want to try day trading with a company like TD Ameritrade or E-Trade. If I do a market type buy or sell order on a stock that’s shifting up and down rapidly in a day, will my order go through quick enough to get the bid price at the time I placed the order? Or do the transactions take so long that it’s not possible to buy and sell at up to the minute prices?
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Sphere: Related ContentI’m a beginner and I want to try day trading with a company like TD Ameritrade or E-Trade. If I do a market type buy or sell order on a stock that’s shifting up and down rapidly in a day, will my order go through quick enough to get the bid price at the time I placed the order? Or do the transactions take so long that it’s not possible to buy and sell at up to the minute prices?
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With the major discount brokerages like those you mentioned, yes. There are some smaller brokerages that sometimes offer cheap commissions that transact only twice per day. I would avoid those.
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A beginner should not start out with day trading. This is not something you just try out. Only the most experienced and most aggressive investors and traders go into day trading.
It is like a guy who never climbed a boulder, trying out for Mt Everest.
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Market trades are normally executed instantaneously, sometimes in a few seconds; u will not need to wait for so long to worry about that
By the way, day trading is a highly risky one and the likelihood of losing ur money is much more than making a profit. It is not a wise idea. Better would be positional trading where u can buy a stock, hold it for sometime and sell it when it goes up. E.g., u can buy the top losing popular stock, hold it for a short time and sell it when it appreciates enough to give u a profit
ferrari
Not quite but pretty fast–a few seconds on market orders normally but not always. If the market is very volatile you will very seldom be able to buy at exactly the last quoted price. Might get get a better price or a worse price. The bid price applies only to sell orders. The ask price applies to buy orders. On my buys at market I almost never get the last ask price. Sometimes it is better sometimes it is worse.
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It would depend on the speed of your Internet Connection, and where you live..You could swing trade progressively shorter till it breaks even, or can’t keep up…Won’t let you keep up.
Did you try swing trading,..It’s more forgiving.
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When stocks are risely/falling rapidly you will more often than not have to place a limit order to buy it. meaning you place a limit order to purchase it at $5.00, and it will go through when the stock hits 5 or lower. limit orders are placed first come first serve, so if the stock hits 5 for one second and goes back up, odds are it wont go through. if you see the stock hit $5.00 and you place a regular market purchase, it will take a few seconds to go through and you might end up buying it at $5.20 while the time to complete the transaction has finalized if the stock really is fluctuating that fast (which can happen). on the flip side, it could drop unexpectedly and youd end up getting it at $4.80 when you thought you placed the order for 5. so it can be a good thing but again the only way to avoid that is through a limit order, and most of the time that will be a requirement anyway. check the “beta” of the stock to get a sense of how easy it will be to day trade.
i day trade and do exactly what you are describing. it is extremely stressful but has the potential to earn you a full days/weeks work in just a few seconds. keep in mind you can also lose that much in a few seconds. this strategy really has more to do with luck than anything. i decide the low price i am searching for and place a limit order for that amount; when it reaches it i get the shares and i immediately process a limit order to sell it. i have the amount of money i want to make off the stock determined ahead of time, so i know exactly what to sell it for to achieve that profit. i place the limit sale for say $6.00, which means it will sell my shares when it hits 6 or higher.
if you open an account with scottrade and use this code, we will both get 3 free trades: ReferALL code: DVPT1985
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To answer your questions – both E-Trade and TD Ameritrade would be about the same time, however Ameritrade is the better of the two firms.
All firms have the same type of order routing systems and all orders on listed trades are routed to the same market therefore they are all entered in the same time frame. However, timing os not always the important part of order entry, there are time when the routing is more important.
Since you are new at trading, and “trying” day trading, order times should be the least of your concerns but after a few trades you will learn this. There’s more to trading than order entry but you will learn this as you go forward
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I’m surprised that nobody mentioned anything about a stock’s trading volume.. some stocks trade very slowly & even eraticaly.. especially penny stocks that are on their last legs.
Market orders for most stocks do tend to trade very rapidly, but there’s no guarantee that you will get the price you want. A limit order can guarantee a price, but not that the trade will executed.. and if the stock does gets traded at that certain price, that doesn’t mean that every who requested that price will have their order filled.
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Yes – THey are more or less instantaneous (within seconds).