Is it normal that some brokers don't post orders to exchanges?
Is it normal that some brokers don't post orders to exchanges?
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UTF-8 · External communityPost link
External question — Personal Finance Stack Exchange
Author: UTF-8
Original post: https://money.stackexchange.com/questions/160987
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About 40 minutes ago, I posted a buy order of IE00B4L5YC18 at 31.12 EUR/share to Scalable Capital for execution at Gettex. The sell price has been fluctuating a bit since but as of the writing of this question is at 31.107 EUR/share (taken from gettex.de). Shouldn't it be at at least 31.12 EUR/share because anyone who wants to sell could sell to me at 31.12 EUR/share?
I've had the feeling that Scalable Capital doesn't post my orders to exchanges before, and it even happened with Comdirect and the Stuttgart stock exchange. But whenever I posted an order to the Frankfurt stock exchange via Comdirect, it showed up after a few minutes if it hadn't already been executed by that time.
With Scalable Capital and Gettex I've even made the experience that days after I had posted my offer,
executed trades
were showing up on gettex.de with worse prices than what I offered.
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Marco · External communityPost link
External answer — Personal Finance Stack Exchange
Author: Marco
Original post: https://money.stackexchange.com/a/161012
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
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Depends. When routing your order through pools first (e.g. you broker does PFOF,
https://www.investopedia.com/terms/p/paymentoforderflow.asp
) the Order would indeed not show up on the exchange. However, "best execution" principle has usually to be followed, which would still mean, that it would eventually reach the "best" exchange, if not filled by a marked-maker or in some dark-pool. (Best does often mean "cheapest" but not always).
However, since your stated price is: 31.107 EUR/share
I would check first:
Is this price just indicative? (e.g. no trades currently, market not
openend etc.)
Are you not missing the ETF's spread? (since
your price has 3 digits, and when I check online, the ETF is traded
with two digits.)
Gettex is a Market-Maker system, which is highly likely to be a quote-driven market, and no order-driven-market (
https://de.wikipedia.org/wiki/Gettex
)
This is common for exchanges which offer structured products. If there is a quote, the market-maker has some small time-frame available, to recalculate his price, and enter a trade or not. This is convenient for the market-makers, but can be frustrating to other participants, if their orders are not filled as indicated. I also experienced this once, but it isn't common, since Market-Makers usually need to guarantee a defined spread, and availability.
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Quoted from Forex.com.bd-Editorial External answer — Personal Finance Stack Exchange Author: Marco Source score (net votes, not local likes): 2 Original post: https://money.stackexchange.com/a/161012 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Depends. When routing your order through pools first (e.g. you broker does PFOF, https://www.investopedia.com/terms/p/paymentoforderflow.asp ) the Order would indeed not show up on the exchange. However, "best execution" principle has usually to be followed, which would still mean, that it would eventually reach the "best" exchange, if not filled by a marked-maker or in some dark-pool. (Best does often mean "cheapest" but not always). However, since your stated price is: 31.107 EUR/share I would check first: Is this price just indicative? (e.g. no trades currently, market not openend etc.) Are you not missing the ETF's spread? (since your price has 3 digits, and when I check online, the ETF is traded with two digits.) Gettex is a Market-Maker system, which is highly likely to be a quote-driven market, and no order-driven-market ( https://de.wikipedia.org/wiki/Gettex ) This is common for exchanges which offer structured products. If there is a quote, the market-maker has some small time-frame available, to recalculate his price, and enter a trade or not. This is convenient for the market-makers, but can be frustrating to other participants, if their orders are not filled as indicated. I also experienced this once, but it isn't common, since Market-Makers usually need to guarantee a defined spread, and availability.
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