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Comment by gnaritas | Hacker News Reader

I trade, I know exactly what a market order is.

It buys at the current market price, which during the filling of the oder may slip as liquidity slips; that's the entire point, fill this order now no matter what. To not have such an order means having your entries and exits fail or partially fill which means you'll just have to reinvent the market order yourself to continue pushing through your order. To ban a market order is to tell me I'm not allowed to enter/exit a position in a single order, that's non-sense. If you don't want slippage, don't use a market order but that comes with the side effect of failed/partially filled orders.

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>To ban a market order is to tell me I'm not allowed to enter/exit a position in a single order, that's non-sense.

You could carry on trading as you currently are. If a stock is trading $100/$100.1 and you want to buy it ('now' as you say), then just set your limit to $1000.

Of course, you will have no one to blame but yourself if, during the ~50 milliseconds it takes for the order to reach the exchange, the market makers have switched off and you end up crossing a massive spread and buying the only available offer at $600 or something. An incredibly unlikely scenario, but it can happen.

So I imagine you'll set your limit to something sensible, like $101. It'll still get filled 'now' 99.9999% of the time. But you won't be taking the risk of doing something epically stupid. There, that wasn't so hard now was it?

> So I imagine you'll set your limit to something sensible, like $101. It'll still get filled 'now' 99.9999% of the time. But you won't be taking the risk of doing something epically stupid.

Your scenario doesn't handle the case a market order does, i.e. close my position now. In a fast moving market, using limit orders for stops or exits is just going to result in partial fills or failed orders. If I want out, I want out, I don't only want out if I lose between X and Y, I want out period; that's what market orders are for, for that convenience, you accept slippage as a reality.

> There, that wasn't so hard now was it?

No, it's easy to do things that don't work, I can pump my order into /dev/null, that's easy too, and it's just as useful as a limit order for stops.

>Your scenario doesn't handle the case a market order does, i.e. close my position now.

I covered that. If you really, truly, want to sell at any price(and I can't imagine why, that is terrible trading), then you set your limit to zero.

That's all a market order is - a special case of a marketable limit order (immediate or cancel/fill and kill/etc) with the limit set to zero (in the case of a sell) or infinity (in the case of buy).

Banning vanilla market orders just forces people to acknowledge that fact, which is a good thing.

> I covered that. If you really, truly, want to sell at any price(and I can't imagine why, that is terrible trading), then you set your limit to zero.

Perhaps to avoid a margin call; your imagination is limited, you seem to forget you also have to buy/sell to exit a position when holding on is not an option. Terrible trading is holding on until you get margin called; when your risk management says get out, you get out. A stop loss isn't a stop loss if it can fail to fill or only get partially filled, a market order is exactly what one desires in a stop loss.

> That's all a market order is - a special case of a marketable limit order (immediate or cancel/fill and kill/etc) with the limit set to zero (in the case of a sell) or infinity (in the case of buy).

Yes, and thus no need to ban it.

> Banning vanilla market orders just forces people to acknowledge that fact, which is a good thing.

You can't force people to acknowledge details they don't care to know about. Ban this, ban that; it's all non-sense from people who think they can force the ignorant to learn, you can't. Banning market orders achieves nothing.

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