Working an Order

barjon

Legendary member
10,612 1,751
OK, your client has asked you to buy 1m shares in GSK (average daily volume 5m) and given you free rein to fulfill that order for him.

1. How do you think your client is going to judge whether you have done a good job for him?

2. How are you going to manage that order?
 

Emini-mouse

Active member
113 12
OK, your client has asked you to buy 1m shares in GSK (average daily volume 5m) and given you free rein to fulfill that order for him.

1. How do you think your client is going to judge whether you have done a good job for him?

2. How are you going to manage that order?

First I would buy a shed load of GSA futures for myself
Then I would buy the clients shares at market all in one go
Then sell my futures on the spike
 

China Diapers

Established member
536 35
Does the client give a maximum price they are willing to pay? I think the client will judge you on the average price they end up paying and whether it is above or below what they expected.

I would execute the order in smaller chunks so as not to alert other market participants that somebody with deep pockets was buying up GSK.
 

China Diapers

Established member
536 35
Does the client give a maximum price they are willing to pay? I think the client will judge you on the average price they end up paying and whether it is above or below what they expected.

I would execute the order in smaller chunks so as not to alert other market participants that somebody with deep pockets was buying up GSK.

So the opposite of what emini-mouse would do, because I'm a nice guy
 

barjon

Legendary member
10,612 1,751
First I would buy a shed load of GSA futures for myself
Then I would buy the clients shares at market all in one go
Then sell my futures on the spike


:LOL:..................and hope you'd made enough to compensate for losing a client.
 

barjon

Legendary member
10,612 1,751
...............I would execute the order in smaller chunks so as not to alert other market participants that somebody with deep pockets was buying up GSK..................

so what might you see in the price action while this was going on?
 

tar

Legendary member
10,443 1,313
First I would buy a shed load of GSA futures for myself
Then I would buy the clients shares at market all in one go
Then sell my futures on the spike

Is there GSK futures ?
 
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barjon

Legendary member
10,612 1,751
I like to think it looks something like this:

http://www.trade2win.com/boards/trading-journals/183492-breakouts-back.html#post2285616

Price bobs up and down in a range as the buyer doesn't want to bid up the price too high

This is something I am quite interested in as I am not always sure if these patterns actually represent accumulation or not.

........including false break-outs, maybe :)
 

China Diapers

Established member
536 35
dbpheonix had a thing or two to say on the subject. I have his book which I hopefully will get round to reading at some point.

Here's something I am wondering, what happens when you see one of these patterns in the forex market, are we to believe somebody is hoovering up all the Yen in existence. You would have to have pretty deep pockets.
 

DionysusToast

Legendary member
5,963 1,499
OK, your client has asked you to buy 1m shares in GSK (average daily volume 5m) and given you free rein to fulfill that order for him.

1. How do you think your client is going to judge whether you have done a good job for him?

2. How are you going to manage that order?

Over what period of time?
 

Jack o'Clubs

Experienced member
1,554 342
OK, your client has asked you to buy 1m shares in GSK (average daily volume 5m) and given you free rein to fulfill that order for him.

1. How do you think your client is going to judge whether you have done a good job for him?

2. How are you going to manage that order?


Assuming the client doesn't have specific orders, the usual target will be to beat (or at least meet) VWAP while trading max 10% of volume. So in this case you'd need two days to execute the order. The client may well want it done in a day (which should be possible with minimal market impact, generally below a 3rd of volume is feasible), or have specific price instructions (ie 'close').
 

China Diapers

Established member
536 35
Assuming the client doesn't have specific orders, the usual target will be to beat (or at least meet) VWAP while trading max 10% of volume. So in this case you'd need two days to execute the order. The client may well want it done in a day (which should be possible with minimal market impact, generally below a 3rd of volume is feasible), or have specific price instructions (ie 'close').

Interesting, thanks. It's good to be reminded every now and again that I know next to nothing about how financial markets work.
 
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ZEN archer

Experienced member
1,528 241
OK, your client has asked you to buy 1m shares in GSK (average daily volume 5m) and given you free rein to fulfill that order for him.

1. How do you think your client is going to judge whether you have done a good job for him?

2. How are you going to manage that order?
:cool:vv
 

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