(Part 2) Top products from r/StockMarket

> A limit order is an order to buy (or sell) at a specified price or better. A buy limit order (a limit order to buy) can only be executed at the specified limit price or lower. Conversely, a sell limit order (a limit order to sell) will be executed at the specified limit price or higher.

http://www.investopedia.com/university/intro-to-order-types/limit-orders.asp

 

We can start with a very simple answer to your question. It first depends on how much stock Albert is willing to buy and how much stock Steve is willing to sell.

 

Bids

10.52 200

10.53 500

 

If Steve puts in a sell order at 10.52 for 500 shares or fewer, he will be filled at 10.53. If Steve puts in a sell order for 600-700 shares, he will be filled at 10.53 for 500 shares and 10.52 for 200 shares.

The more complicated answer to your question depends on which exchange you route your order to and on which exchange the bids and offers exist. There's not just one "stock exchange" or two - Nasdaq and New York Stock Exchange - but rather many places where bids and offers exist in the market.

 

Bids

10.52 200 ARCA

10.53 200 ARCA

10.53 100 BATS

10.53 300 EDGA

 

If Steve sends an order to sell 300 shares at 10.53 on EDGA, he will get filled on 300 shares from EDGA. If he sends an order to sell 500 shares on EDGA, he will get filled on 300 shares from EDGA and possibly be able to get the other 200 shares at 10.53. The reason this is so complicated is that high frequency traders are able to get to the other exchanges quicker than Steve's order is able to get from EDGA to ARCA and BATS to get the other stock. So we can only be sure that Steve's order will be filled in the size listed on the exchange to where he sends the order. This concept is explained in Flash Boys.

 

In essence, your questions are a bit too simplified because orders are placed with respect to a size, price, exchange, and a host of other properties. Some orders are even hidden!

 

TL;DR Steve's order will fill first at 10.53 for whatever stock he can get and then finish at 10.52 if there is enough stock there to finish the size on his order. Albert's order will fill in the converse. Buy limit allow you to purchase a stock at that price or lower. Sell limit orders allow you to sell stock at that price or higher.

We all love the stock market. Yeah, but slightly off base here. Baseball betting, it's legal in New Jersey now. If you are into stats and ALGO seems like a natural, picked 6 winners in a row. That's never happened to me in the market. :-)

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Baseball is all stats, if you put your time into it, think you can come out ahead. Lots.

Back to the dow ... :-)

Here's a former trader saying how he does it:


\> Trading Bases: How a Wall Street Trader Made a Fortune Betting on Baseball

https://www.amazon.com/Trading-Bases-Fortune-Betting-Baseball/dp/0451415175/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=&sr=

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Trading options is more complex than trading binary instruments (stocks, fx, futures, etc) as there are a lot more moving parts. Options are like ternary instruments, they allow one to profit if the underlying goes up, down, or sideways. Best way to get started is to learn what a put and a call are. Then move onto basic positions. The best approach I can recommend is to pickup a beginners book. I read this - the first version - which taught me the ropes quickly. I also picked up several other books afterwards that got into the subject on a deeper and more technical level. One of the most fascinating things I've learned so far is what implied volatility is. See another post. With IV you can work out statistically the chances of a trade profiting. Like someone else mentioned, www.tastytrade.com, a free streaming live options talk show, is based on statistical trading and not trading on fear/hope.

Traditionally, iron condors are traded with index ETF options such as the SPY or IWM. There's obviously less risk of a massive move in a short amount of time. Though black swans do exist, see 2008, euro crisis, debt ceiling, etc. If the s&p or the russel stays in your IC's range until it expires, you win. You profit on theta decay this way. Since ICs are short volatility, there was a huge drop in NFLX implied vol today -went from 70sh to 50sh. That 20 some odd point drop in IV alone amounted to over 50% of $4800. The rest was from theta decay and delta.

I found this to be a pretty good resource from a non-biased source. Granted it gets decently technical and doesn't read like a novel.. but if you're actually interested -- should be worth the skim. (particularly the section on market-micro-structure). There's probably a better book out there more focused specifically on market-micro-structure, but I haven't read it.

http://www.amazon.com/Science-Algorithmic-Trading-Portfolio-Management/dp/0124016898/ref=sr_1_5?ie=UTF8&qid=1412367379&sr=8-5&keywords=algorithmic+trading

If you want the full backstory, here’s a good book
https://www.amazon.com/Complete-TurtleTrader-Investors-Overnight-Millionaires/dp/0061241717

Basically in the 1980s two billionaires decided to settle a bet between themselves. One of them believed that successful trading could be taught to anyone and the other believed that successful trading was a god given skill that could not be taught. They ran their experiment over the course of 5 years and it was wildly successful

I'm a semi informed guy on stocks but totally clueless on options. Just started reading 'understanding options" by Michael sincere. It's a 2014 2nd edition. Seems to be pretty good so far.. seems to be geared toward beginners
http://www.amazon.com/Understanding-Options-2E-Michael-Sincere/dp/0071817840/ref=sr_1_1?ie=UTF8&qid=1395119091&sr=8-1&keywords=understanding+options

Agreed, definitely feel like I'm walking on eggshells when discussing the matter.

In regard to "The Games People Play," is this the edition you're referring to?

https://www.amazon.com/Games-People-Play-Transactional-Analysis/dp/0345410033

The Little Book of Market Myths by Ken Fisher
https://www.amazon.com/dp/1118445015/ref=cm_sw_r_sms_awd_x_JnX4xbNJEBS4X

With a net worth of $2.7B and the largest wealth management firm in the US, Ken knows what he's talking about. I may be a little biased, but this book was very helpful in quelling the rumors in my naïve mind.

There's a book by the same name. I thought it was a good read, but I read it out of interest, not so much looking for technical knowledge.

https://www.amazon.com/dp/0071803254/ref=cm_sw_r_cp_api_Jnl1AbRGWWZSD

This book. Read it and you’ll have a GREAT understanding coming from no experience.

That, or just head over to /r/wallstreetbets

Read the Bogleheads guide to investing. This honestly should be required reading for all Americans. The Bogleheads' Guide to Investing https://www.amazon.com/dp/0470067365/ref=cm_sw_r_cp_api_i_6tBgDbZ99RCSR

I can recommend "A Random Walk Down Wall Street". Talks about everything you need to know.
http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393340740/ref=sr_1_2?ie=UTF8&qid=1458593263&sr=8-2&keywords=random+walk+down+wall+street

I have book to recommend to you:

https://www.amazon.com/Essentials-Investments-9th-Zvi-Bodie/dp/0078034698/

chart

More in-depth study can be found here

These two books

https://www.amazon.ca/Technical-Analysis-Financial-Markets-Comprehensive/dp/0735200661

And

https://www.amazon.ca/Technical-Analysis-Complete-Financial-Technicians/dp/0134137043

Random Walk Down Wall Street

I'd suggest reading the Four Pillars of Investing

https://www.amazon.com/Common-Stocks-Uncommon-Profits-Writings/dp/0471119288

https://www.amazon.com/Investment-Valuation-Tools-Techniques-Determining/dp/111801152X

read more from Aswath Damodaran, he's one of the most highly regarded equity valuations experts. In addition, read the news from a reputable source (WSJ, FTs...) multiple times every day.

Be patient.

I bought this book in 1982 and it got me started, it has been updated over the years, How to Invest $50-$5,000 10e: The Small Investor's Step-by-Step Plan for Low-Risk Investing in Today's Economy
http://www.amazon.com/How-Invest-50-Step-Step/dp/0061935166