Saturday, March 8, 2008

Perplexed by partial fills

I am learning new things about the markets every day that I am trading options. One of these new things that continue to surprise me is partial fills. If your trades are small compared to the liquidity of a stock, you rarely see this. For example, if you trade 500 shares of GE, it is usually always executed in a single fill. However, if you trade 500 shares of a company like USEC (USU), then you might get fills of 100 shares at a time (especially if you use a limit order). This, I understand.

What I don't get is why sometimes people are just out to get you. Take a look at the following trade result. That's right, I got filled 4 shares of a 3.49 stock. Someone paid a commission to sell 13.96 worth of shares. I don't think it is a part of a larger order because I was sitting on that limit order for a while. Notice the round lot fills around it.

Is it just a mistake or is it a glimpse into the sort of people that trade micro cap issues? Did they want to bail out and get a couple dollars from their position? Either way, it sucked for me since it took a really long time for the last 96 shares to be filled and I saw lots of round lots fly by. In the end, someone else got filled 96 and then is looking to sell 4 shares and the annoyance gets passed around.

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