Stock trade: Is this a 2% slippage? and is it normal?

[mickael28]

Hi guys,

Trying to understand what happened here to limit its occurrence in the future.

Basically, I entered a Stop Buy Order on BEAT at 17.75 on Interactive Brokers yesterday. At the open today, I saw that services like yahoo and google finance, tradingview and a coupe of others reporting the opening price as 17.73.

I was expecting a filling with a little bit slippage, but it got filled at 18.10 (which seems the highest for the day.

A few doubts:

1. Is it normal an almost 2% price difference between my Stop order and the execution price? My trade was logged 6 seconds past the open, if that makes any difference...
2. and any idea what could have caused it? I thought that if there's a lot of demand at the open, then the stock usually opens with a price that's already gap up and then it continues trading smoothly.
   But in this case it seems that it gap up ~1% from the close price the previous session at the open, and then in a matter of seconds its price was 2% higher than the open price as that's the price that my order got executed. Is this behaviour normal in stocks as well (kind of like a double gap up in a matter of seconds)?

Thanks!

 

[mb325]

I see about 18k shares trading in the first minute and an all-day high of just below 18.10 so given (afaik) that price didn't even print it doesn't look like a great fill!

No idea what caused it I'm afraid.

 

[barjon]

I guess that Yahoo, Google etc are showing the mid-price. You would have been filled on the offer price and the spread would have likely widened significantly on the open until things settled down.

 

[timsk]

Hi mickael28,
Just to add to mb325 and barjon's comments, keep in mind that a stop buy order is a relatively slow way to enter a position if execution speed is critical. My understanding is that the trigger is hit which then acts as an instruction to your broker's platform to send a market order to the exchange. This will then be filled on a 'first come first served' basis and, if there are some big orders ahead of you in the queue, you're likely to get slippage and/or a partial fill. Then there's the issue of the manner in which the order is filled; this Investopedia article explains the options: Understanding Order Execution. I suspect a combination of the above factors conspired against you - and you were just unlucky. Worth a phone call or e-mail to IB all the same to hear their take on it. Maybe there's something to be learnt to protect you from it happening again in the future.
Tim.

 

[mb325]

I guess that Yahoo, Google etc are showing the mid-price. You would have been filled on the offer price and the spread would have likely widened significantly on the open until things settled down.

I'm going off a historical bloomberg terminal chart which does show the actual prices that traded, not the offer etc., his didn't, I would definitely question it, if only to see what their excuse is. As I said 18k shares traded in that first minute so to not get any on the move higher is odd to me. I realise they need to take their cut but to fill you at a price which didn't trade in the market is taking the proverbial in my opinion.

 

[barjon]

I'm going off a historical bloomberg terminal chart which does show the actual prices that traded, not the offer etc., his didn't, I would definitely question it, if only to see what their excuse is. As I said 18k shares traded in that first minute so to not get any on the move higher is odd to me. I realise they need to take their cut but to fill you at a price which didn't trade in the market is taking the proverbial in my opinion.

Assuming Michael is trading in the real market that's right. Otherwise if anything was offered at his price it would have been triggered regardless of any actual trade