Level 2 And The UK User

Captain Haddock

Active member
122 5
Richard, knifemac's got it spot on re icebergs.

Last year the stock exchange introduced iceberg orders that are placed with the exchange as explained by knifemac.

There are however as also mentioned, traders who use computer programs to place tranches of orders into the market, they act in a similar way to icebergs but with some subtle differences, the main one being once they have a tranche filled they must return to the back of the queue on that price for the next tranche.

Here is an interesting link RE icebergs chp 4.2, it takes a while to load but has all the info on.

http://www.londonstockexchange.com/...000;+background-color:+#FFFF00">&Post=</FONT>

0.25% is way too much to be paying, you want at least 0.15% if you can get it, and even thats not worth the spread on most shares. Be careful, heavy coms will cripple you if you're just starting out and learning. Who are you using at the moment to spreadbet with? some have spreads equal to the market price, so its a great chance to go in and out of trades learning as you go without paying for the privalege.

Obviously it all depends on the style of trading that suits you best and the type of shares you will be trading, if you like to swing positions over a period of time then the cost to carry the position will be important, if you're a scalper, then the cost to trade is crucial.
 

richarjl

Junior member
11 0
Captain Haddock said:
Richard, knifemac's got it spot on re icebergs.

Last year the stock exchange introduced iceberg orders that are placed with the exchange as explained by knifemac.

There are however as also mentioned, traders who use computer programs to place tranches of orders into the market, they act in a similar way to icebergs but with some subtle differences, the main one being once they have a tranche filled they must return to the back of the queue on that price for the next tranche.

Here is an interesting link RE icebergs chp 4.2, it takes a while to load but has all the info on.

http://www.londonstockexchange.com/...000;+background-color:+#FFFF00">&Post=</FONT>

0.25% is way too much to be paying, you want at least 0.15% if you can get it, and even thats not worth the spread on most shares. Be careful, heavy coms will cripple you if you're just starting out and learning. Who are you using at the moment to spreadbet with? some have spreads equal to the market price, so its a great chance to go in and out of trades learning as you go without paying for the privalege.

Obviously it all depends on the style of trading that suits you best and the type of shares you will be trading, if you like to swing positions over a period of time then the cost to carry the position will be important, if you're a scalper, then the cost to trade is crucial.


Thanks for the link to the LSE paper.

I had a look at the info about the iceberg orders and the tranching system. I was previously aware of the fill or kill, execute and eliminate, limit and at best orders that went via SETS. I have not yet had a chance to really think about this knowledge and it's useful application to trading via L 11 but it has got me thinking. It strikes me in the case of the iceberg orders, if you could spot them coming onto the book then you could make the judgement that there's more stock possibly coming at a given price. How much you would not be aware of but to some extent you are alerted to this fact. I'll try and spot a trader tranching also. I guess this practise has the same implication to the iceburg method.

I normally use the order book with a 1% filter either side of the yellow strip price, i.e the best bid and offer available. Instead of looking at all the orders in that range I then select the summary tab on the ADVFN package. I can only imagine that you could spot the above 2 order types using the all orders listing. This leads me on to another point.

Do you or any other readers think there is any benefit in looking at all the orders in a % filter for the above reason and in general use?

When I look at all the orders under under a certain filter I see a lot more action going on but it's very difficult to determine what it all means. It would be interesting to know what is the most popular display. Is it all orders in a particular range or that range in summary?

I currently use DEAL4FREE , IGINDEX AND FINSPREADS for my spreadbetting. I only trade the oil and metal markets. I trade the underlying commodities also. Each company seems to have it's own strengths and weaknesses. I also buy stock via a broker for long term positions. The cost of a spreadbet gets more expensive the longer it runs especially as the stake size is increased.

Today I have been watching BP. The order book has looked very different from normal over the last 3 days. The stock has been slowly declining but the bid side volume as a ratio to sell side volume is very high, historically. It has ranged from 4:1 to 6:1 for long periods on a 1% filter. Most of the action is on the bid side and orders are being left so as they can be traded against. Supply and demand is in a fair balance. The book suggests a stable and calm market and no panic but nevertheless a declining price is the result. It's interesting to watch and it's tempting to buy this stock as it appears that it will start to move higher. The stock is very near support levels and the book also suggests this. I could look at the order book at any time today and with a certain degree of accuracy state what the chart would look like a few minutes ahead. All very predictable in the very short term. It also suggests to me that I should sit and wait for the time being. I have a bullish bias with this one so I am looking to take a long position.

At the moment the book is therefore useful to me in a very short and a longer term time frame say over several days.

I would be interested to know if there is a general consensus regarding the usefulness of level 11 over the short term as opposed to the medium term time frame.
 
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock