vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"A ""market maker"" is someone that is contractually bound, by the exchange, to provide both bid and ask prices for a given volume (e.g. 5000 shares). A single market maker usually covers many stocks, and a single stock is usually covered by many market makers. The NYSE has ""specialists"" that are market makers that also performed a few other roles in the management of trading for a stock, and usually a single issue on the NYSE is covered by only one market maker. Market makers are often middlemen between brokers (ignoring stuff like dark pools, and the fact that brokers will often trade stocks internally among their own clients before going to the exchange). Historically, the market makers gave up buy/sell discretion in exchange for being the ""go-to guys"" for anyone wanting to trade in that stock. When you told your broker to buy a stock for you, he didn't hook you up with another retail investor; he went to the market maker. Market makers would also sometimes find investors willing to step in when more liquidity was needed for a security. They were like other floor traders; they hung out on the exchange floors and interacted with traders to buy and sell stocks. Traders came to them when they wanted to buy one of the specialist's issues. There was no public order book; just ticker tape and a quote. It was up to the market maker to maintain that order book. Since they are effectively forbidden from being one-sided traders in a security, their profit comes from the bid-ask spread. Being the counter-party to almost every trade, they'd make profit from always selling above where they were buying. (Except when the price moved quickly -- the downside to this arrangement.) ""The spread goes to the market maker"" is just stating that the profit implicit in the spread gets consumed by the market maker. With the switch to ECNs, the role of the market maker has changed. For example, ForEx trading firms tend to act as market makers to their customers. On ECNs, the invisible, anonymous guy at the other end of most trades is often a market maker, still performing his traditional role.
This keeps them from paying too much for shares they're going to have to find a buyer for eventually, and it can sometimes slow down the pace of selling as investors and automated systems notice the price decline and decide to wait to sell. Conversely, if market makers see a wave of buy orders coming into the system, they'll start marking their ask prices up to maximize their gains, since they're selling you shares they bought from someone else, presumably at a lower price. But they typically adjust their prices up or down before they actually fill trades. (sneaky, eh?) Depending on how much volume there is on the shares of the company you're selling, and depending on whether there are more buyers than sellers at the moment, your share sell order may be filled at market by a market maker with no real consequence to the share's price. If the block is large enough then it's possible it will not all sell to one market maker, or it might not all happen in one transaction or even all at the same price. This is a pretty complex subject, as you can see, and I've cut a LOT of corners and oversimplified much to keep it comprehensible. But the short answer to your question is -- it depends. Hope this helps. Good luck!"
(Except when the price moved quickly -- the downside to this arrangement.) ""The spread goes to the market maker"" is just stating that the profit implicit in the spread gets consumed by the market maker. With the switch to ECNs, the role of the market maker has changed. For example, ForEx trading firms tend to act as market makers to their customers. On ECNs, the invisible, anonymous guy at the other end of most trades is often a market maker, still performing his traditional role. Yet brokers can interact directly with each other now, rather than relying on the market maker's book. With modern online investing and public order books, retail investors might even be trading directly with each other. Market makers are still out there; in part, they perform a service sold by an Exchange to the companies that choose to be listed on that exchange. That service has changed to helping tamp volatility during normal high-volatility periods (such as at open and close)."
"It depends on many factors, but generally, the bid/ask spread will give you an idea. There are typically two ways to buy (or sell) a security: With a limit order, you would place a buy for 100 shares at $30-. Then it's easy, in the worst case you will get your 100 shares at $30 each exactly. You may get lucky and have the price fall, then you will pay less than $30. Of course if the price immediately goes up to say $35, nobody will sell at the $30 you want, so your broker will happily sit on his hands and rake in the commission while waiting on what is now a hail Mary ask. With a market order, you have the problem you mention: The ticker says $30, but say after you buy the first 5 shares at $30 the price shoots up and the rest are $32 each - you have now paid on average $31.9 per share. This could happen because there is a limit order for 5 at $30 and 200 at $32 (you would have filled only part of that 200). You would be able to see these in the order book (sometimes shown as bid/ask spread or market depth). However, the order book is not law. Just because there's an ask for 10k shares at $35 each for your $30 X stock, doesn't mean that by the time the price comes up to $35, the offer will still be up. The guy (or algorithm) who put it up may see the price going up and decide he now wants $40 each for his 10k shares. Also, people aren't obligated to put in their order: Maybe there's a trader who intends to trade a large volume when the price hits a certain level, like a limit order, but he elected to not put in a limit order and instead watch the ticker and react in real time. Then you will see a huge order suddenly come in out of nowhere. So while the order book is informative, what you are asking is actually fundamentally impossible to know fully, unless you can read the minds of every interested trader.
While theoretically it works it's not a realistic trade because of market efficiency. It's realistic for brokers to advertise trades like this so they can earn more customers and commission. These sorts of trades will be priced in to highly liquid big ticket names like KO and the vast majority of the market. The possibility exists with small names with less liquidity, less trading volume; however, the very execution of this trade will alter the behavior of impending traders thus minimizing any potential profits.
buy above the current price in the stock market You can do that, but what is the purpose to do so ? Brokers take the limit price of your order as the highest price you are going to pay. So if an order can be fulfilled below the limit they will do so.  can I sell below the current price  You can put in a order to do so. But what I have seen with my current broker is that the order never reached the market and wasn't executed at all. The broker might have some safeguards or process in place to stop me from doing so. Not sure how other brokers deal with it.
"Sure they work - right until they don't. Explanation: A stock picking strategy based on technical indicators is at worst a mix of random guessing and confirmation bias, which will ""work"" only due to luck.  At best, it exploits a systematic inefficiency of the market. And any such inefficiency will automatically disappear when it is exploited by many traders. If it's published in a book, it is pretty much guaranteed not to work anymore. Oh, and you only get to know in hindsight (if at all) which of the two cases above applies to any given strategy."
I'm talking about day trading here. Automated day trading never worked for me. But I will also admit I am terrible at automated day trading. I'm sorry if the premise of my post sounds off. I know it sounds like I'm being an idiot by not going the automated route, but it works for me and that's why I'm going to stick with my own techniques. Why change it if it's working?
While littleadv's answer is true for many exchanges (in particular the stock market, it's called FIFO matching) you should also know that some markets trade pro rata.  That is, for a match at some price level everyone at that level gets a chunk of the deal proportional to their input (i.e. order size). E.g. match for quantity X at a price level and passive side orders y1, y2; the order y1 would get y1 / (y1 + y2) of X and y2 would get y2 / (y1 + y2)  (for X = min(X, y1 + y2)).
I tried automation and it didn't work as well. Automation is great if you want to sell or buy when a stock drops or rises; however, automation is terrible for day trading. Specifically because it is impossible to automate a program to scan every news feed. Even then, automation is only if you want to be the effect of a rise or drop in the market. A stock rises or drops and you sell or buy. The problem that arises is that it is nearly impossible to make money off of automating trades. You need to buy the stock before it rises and sell it before it drops. There is no way any program will ever be able to do that accurately.
As far as i understand the big companies on the stock markets have automated processes that sit VERY close to the stock feeds and continually processes these with the intention of identifying an opportunity to take multiple small lots and buy/sell them as a big lot or vice/versa and do this before a buy or sell completes, thus enabling them to intercept the trade and make a small profit on the delta. With enough of these small gains on enough shares they make big profits and with near zero chance of losing.
Many of the Bitcoin exchanges mimic stock exchanges, though they're much more rudimentary offering only simple buy/sell/cancel orders.  It's fairly normal for retail stock brokerage accounts to allow other sorts of more complex orders, where once a certain criteria is met, (the price falls below some $ threshold, or has a movement greater than some %) then your order is executed.  The space between the current buy order and the current sell order is the bid/ask spread, it's not really about timing.  Person X will buy at $100, person Y will sell at $102.  If both had a price set at $101, they would just transact.  Both parties think they can do a little bit better than the current offer.  The width of the bid/ask spread is not universal by any means.  The current highest buy order and the current lowest sell order, are both the current price.  The current quoted market price is generally the price of the last transaction, whether it's buy or sell.
"You avoid pattern day trader status by trading e-mini futures through a futures broker. The PDT rules do not apply in the futures markets. Some of the markets that are available include representatives covering the major indices i.e the YM (DJIA), ES (S&P 500) and NQ (Nasdaq 100) and many more markets. You can take as many round-turn trades as you care to...as many or as few times a day as you like. E-mini futures contracts trade in sessions with ""transition"" times between sessions. -- Sessions begin Sunday evenings at 6 PM EST and are open through Monday evening at 5 PM EST...The next session begins at 6 pm Monday night running through Tuesday at 5 PM EST...etc...until Friday's session close at 5 PM EST. Just as with stocks, you can either buy first then sell (open and close a position) or short-sell (sell first then cover by buying). You profit (or lose) on a round turn trade in the same manor as you would if trading stocks, options, ETFs etc. The e-mini futures are different than the main futures markets that you may have seen traders working in the ""pits"" in Chicago...E-mini futures are totally electronic (no floor traders) and do not involve any potential delivery of the 'product'...They just require the closing of positions to end a transaction. A main difference is you need to maintain very little cash in your account in order to trade...$1000 or less per trade, per e-mini contract...You can trade just 1 contract at a time or as many contracts as you have the cash in your account to cover. ""Settlement"" is immediate upon closing out any position that you may have put on...No waiting for clearing before your next trade. If you want to hold an e-mini contract position over 2 or more sessions, you need to have about $5000 per contract in your account to cover the minimum margin requirement that comes into play during the transition between sessions... With the e-minis you are speculating on gaining from the difference between when you 'put-on' and ""close-out"" a position in order to profit.
"First, as @littleadv mentions, and as I've pointed out before, anyone who participates in a market using limit orders (which, by the way, should be every non-professional investor) is by definition a market maker. So, I will assume that your question pertains both to official market makers and to ""retail investors"" using limit orders. When you remark that there are such ""tight spreads"" in ""liquid assets"", what you are really saying is ""wow, look at all the market makers in these products!"" That's the benefit of electronic trading and algorithmic traders -- millions of participants each with their own opinion of the value of a financial instrument, trying to find people who have very specifically opposing opinions of the value of that same instrument. This is called price discovery, and is the entire point of financial markets. So, you ask why are there all these market makers present to create such tight spreads in assets like SPY? Answer: Because they can make money in these markets: Imagine (towards a contradiction) that market makers thought they couldn't make money by offering tight spreads in SPY, and so SPY had a wider spread than it actually does. For example, say the highest bid for SPY was $99.98 and the lowest ask was $100.01. Now imagine that a market maker with perfect knowledge of the future came along knowing that he would be able to sell SPY for $100.01 in 5 minutes. Then he would load up as many buy orders as he could for $100.00 or lower. (He wouldn't bid $100.01 or higher because those trades would not be profitable according to his information -- at least not 5 minutes from now.) So the spread had previously been $0.03 and then suddenly it was $0.01, all because a market maker with better information came along and realized he could make money by creating a tighter market! Now, nobody has perfect knowledge of the future, which is why markets are never infinitely tight or infinitely liquid. Each market maker has to weigh possible profits against the probability that those profits will actually turn into losses. But if one market maker decides not to participate in a particular instrument, there's bound to be another market maker who will happily take his place.
"If the price used to be 2.50 but by the time you get in an order it's 2.80, you're going to have to pay 2.80. You can't say, ""I want to buy it at the price from an hour ago"". If you could, everybody would wait for the price to go up, then buy at the old price and have an instant guaranteed profit. Well, except that when you tried to sell, I suppose the buyer could say, ""I want to pay the lower price from last July"". So no, you always buy or sell at the current price. If you submit an order after the markets close, your broker should buy the stock for you as soon as possible the next morning. There's no strict queue. There are thousands of brokers out there, they don't take turns. So if your broker has 1000 orders and you are number 1000 on his list, while some other broker has 2 orders and number 1 is someone else wanting to buy the same stock, then even if you got your order in first, the other guy will probably get the first buy. LIFO and FIFO refer to any sort of list or queue, but don't really make sense here. When the market opens a broker has a list of orders he received overnight, which he might think of as a queue. He presumably works his way down the list. But whether he follows a strict and simple first-in-first-out, or does biggest orders first, or does buys for stocks he expects to go up today and sells for stocks he expects to go down today first, or what, I don't know. Does anybody on this forum know, are there rules that say brokers have to go through the overnight orders FIFO, or what is the common practice?"
This is copying my own answer to another question, but this is definitely relevant for you: A bid is an offer to buy something on an order book, so for example you may post an offer to buy one share, at $5. An ask is an offer to sell something on an order book, at a set price. For example you may post an offer to sell shares at $6. A trade happens when there are bids/asks that overlap each other, or are at the same price, so there is always a spread of at least one of the smallest currency unit the exchange allows. Betting that the price of an asset will go down, traditionally by borrowing some of that asset and then selling it, hoping to buy it back at a lower price and pocket the difference (minus interest). Going long, as you may have guessed, is the opposite of going short. Instead of betting that the price will go down, you buy shares in the hope that the price will go up. So, let's say as per your example you borrow 100 shares of company 'X', expecting the price of them to go down. You take your shares to the market and sell them - you make a market sell order (a market 'ask'). This matches against a bid and you receive a price of $5 per share. Now, let's pretend that you change your mind and you think the price is going to go up, you instantly regret your decision. In order to pay back the shares, you now need to buy back your shares as $6 - which is the price off the ask offers on the order book. Similarly, the same is true in the reverse if you are going long. Because of this spread, you have lost money. You sold at a low price and bought at a high price, meaning it costs you more money to repay your borrowed shares. So, when you are shorting you need the spread to be as tight as possible.
You can, in theory, have the stock price go up without any trading actually occurring. It depends on how the price is quoted. The stock price is not always quoted as the last price someone paid for it. It can also be quoted as the ask price, which is the price a seller is willing to sell at, and the price youd pay if you bought at market. If I am a seller, I can raise the asking price at any time. And if there are no other sellers, or at least none that are selling lower than me, it would look like the price is going up. Because it is, it now costs more to buy it. But no trading has actually occurred.
"In general there are two types of futures contract, a put and call.  Both contract types have both common sides of a transaction, a buyer and a seller.  You can sell a put contract, or sell a call contract also; you're just taking the other side of the agreement.  If you're selling it would commonly be called a ""sell to open"" meaning you're opening your position by selling a contract which is different from simply selling an option that you currently own to close your position. A put contract gives the buyer the right to sell shares (or some asset/commodity) for a specified price on a specified date; the buyer of the contract gets to put the shares on someone else.   A call contract gives the buyer the right to buy shares (or some asset/commodity) for a specified price on a specified date; the buyer of the contract gets to call on someone for shares. ""American"" options contracts allow the buyer can exercise their rights under the contract on or before the expiration date; while ""European"" type contracts can only be exercised on the expiration date. To address your example.  Typically for stock an option contract involves 100 shares of a stock.  The value of these contracts fluctuates the same way other assets do.  Typically retail investors don't actually exercise their contracts, they just close a profitable position before the exercise deadline, and let unprofitable positions expire worthless.  If you were to buy a single call contract with an exercise price of $100 with a maturity date of August 1 for $1 per share, the contract will have cost you $100.  Let's say on August 1 the underlying shares are now available for $110 per share.  You have two options: Option 1: On August 1, you can exercise your contract to buy 100 shares for $100 per share.  You would exercise for $10,000 ($100 times 100 shares), then sell the shares for $10 profit per share; less the cost of the contract and transaction costs. Option 2: Your contract is now worth something closer to $10 per share, up from $1 per share when you bought it.  You can just sell your contract without ever exercising it to someone with an account large enough to exercise and/or an actual desire to receive the asset or commodity."
Mutual funds don't work like stocks in that way. The price of a mutual fund is set at the end of each day and doesn't fluctuate during the day. So no matter when you put in your order, it will be filled at the end of the day at whatever the closing price is for that day. Here is some good information on that There is no continuous pricing of fund shares throughout the trading   day. When an investor places an order to buy or sell a fund's shares,   the order is executed based on the NAV calculated at the end of that   trading day, regardless of what time during the day the order was   placed. On the other hand, if the investor were to check the price of   his or her fund shares halfway through the business day, the price   quoted would be the previous day's NAV because that was the last time   the fund calculated and reported the value. -http://www.finweb.com/investing/how-mutual-funds-are-priced.html
"A ""stock price"" is nothing but the price at which some shares of that stock were sold on an exchange from someone willing to sell those shares at that price (or more) to someone willing to buy them at that price (or less). Pretty much every question about how stock prices work is answered by the paragraph above, which an astonishingly large number of people don't seem to be aware of. So there is no explicit ""tracking"" mechanism at all. Just people buying and selling, and if the current going price on two exchanges differ, then that is an opportunity for someone to make money by buying on one exchange and selling on the other - until the prices are close enough that the fees and overhead make that activity unprofitable. This is called ""arbitrage"" and a common activity of investment banks or (more recently) hedge funds and specialized trading firms spun off by said banks due to regulation."