Placing an 'order' with a spread-betting firm

[westhamtim]

Afternoon all

First up, yes, I'm a spread-betting novice, yes, I should have had my lawyer pour over the T&Cs, and yes I've only got myself to blame! With that out of the way, could any seasoned professionals kindly tell me whether the tale of woe below is convention and / or whether I have been wronged?

I placed an order prior to the market opening this morning to buy a particular stock on the spreads. The order required me to submit buy / sell, quantity and price which I duly did. The order was then filled but at a price significantly above that which I had specified (due to the market gapping on opening, I'm fine with this). Is this right? When I've dealt on my SIPP & ISA if I specify a price then if the market never trades at that price the order either remains unfilled or is cancelled, depending on what I've specified.

If the order is going to be filled at the first price, why ask me to specify a price? Simiarly, there is also a 'good until' option (end of day / cancelled / specified time). Again, if the order is filled at the first available price, what's the point of asking this?

Any guidance gratefully received. TBH I expected some singeing of my fingers in the early days (and stakes are low to reflect this) but this just seems wrong.

Thanks

[walm]

I am no pro but I think you need to look up the difference between "Stop orders to open" and "Limit orders to open".

[anonymous-user]

The above covers the orders. The time frame for the order to expire gives you flexibility for how long you plan for the trade to be valid.

The spreads at the beginning of the day for equities tend to be quite wide. This is made even worse with the SB company's spread wrapped around it. Something to be aware of.

[anonymous-user]

I'm afraid there is nothing wrong with what happened.

You were simply gapped on your price and that is the hazard that you run when trying to play the open.

The SB firm don't know how big the market will gap (I think) so naturally you can set your orders at any price you wish, if the market doesn't gap then you'll be filled at your price, however, in your situation, the market did gap.

[afrochicken]

westhamtim said:

Any guidance gratefully received

Phone your SB company's customer service department and tell them what you have told us. They will explain whether it should have happened and whether there is a different type of order on their platform that you can use in the future to prevent this happening again.

[westhamtim]

Thanks all for your input. Seems this was a valid learning point on my part, which as I suggested I did somewhat expect.

I'd still suggest that requesting a price is at worst misleading but at least I'll know for next time.

Thanks again.

[walm]

westhamtim said:

I'd still suggest that requesting a price is at worst misleading but at least I'll know for next time.

I have no idea who uses these to BUY positions but the default order on IG is a stop order to open when the market is closed.

Those become market orders once the stop is passed.
It isn't misleading - it's simply a very odd way to place a buy order IMHO and I don't know why they have it as default rather than a limit order.

It makes a lot more sense on SELL orders.
Price drops through 5800 and then you sell at market thus protecting your downside.

For a BUY order I only ever use limit orders thus capping the amount you can spend.


This isn't something hidden buried in their T&Cs or something you need to take to customer service.
This is simply knowing exactly the dynamics of the order you have placed.

Personally I found orders before a market opened too much of a headache.
As a novice I stuck with open markets and also guaranteed stops! More expensive but saved me a packet in the less liquid names I favour.