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I Market-on-Close (MOC) Orders Other types of orders—such as those above the market, below the market, or conditional orders—are executed in essentially the same way. Because they are resting orders, however, they are not filled immediately. Let's look at the different types of orders that are possible and the intricacies that may be involved with some of these orders. A market-on-close (MOC) order is an instruction to the market maker to execute an order—to buy or to sell—at or near the close of trading. Your order is frequently executed during the last few seconds of trading and, in most cases, your price fill will not be too different from the closing price. Very frequently, such orders are filled in the closing price range. On occasion, MOC orders don't result in particularly good fills. My experience indicates that these orders in most active markets don't result in terribly bad price fills, but a difference of several ticks between what you expected and what you received can occur. Before using this type of order, make certain it is a valid order type. As the SSF markets become more actively traded and the electronic order system overcomes its limitations, various types of orders may be accepted, although initially they may not be permitted. On occasion, MOC orders work to your advantage, particularly when a market is very strong or very weak as the final minutes of trading approach. Assume, for example, that you would like to buy at the end of the day, and further assume that the market is weak. In such a case, the market will often drop even lower on the close, as those who were buying during the day place MOC orders to sell or sell at the market shortly before the close of the day session. If you are short and have a MOC order to buy, or if you want to go net long, chances are you will get a reasonably good fill, as many traders rush to sell out their long positions at or near the day's low. The reverse often holds true with MOC orders to sell. If the market is sharply higher and you have a long position you would like to liquidate by the close or a short you would like to establish, this could be an ideal situation. Frequently, in a market that has been strong all day, we see a rush to the upside, bringing prices even higher at the end of the session. This happens because those who were short for the day place orders to cover their short positions prior to the close of trading. Massive buying then ensues, which runs prices up to your advantage, if you are on the correct side of the market. Because you will be selling, you may get a better price fill than you expected. Also, MOC orders should be avoided in thin markets, because they can result in poor price execution. stock investment ~ forex signal |