How to Use a Step to Market Order (Stocks)
A Step to Market order can be used with an order to buy, sell or close a Stock position. The Step to Market order automatically modifies the order from a selected starting value in the spread toward the Market. Select the starting value for the order and the program does the rest. The idea behind this order is to attempt to get a more favorable fill than the Market price. If no preferable fill is available the order will go to the Market.
1. Click the Buy button on the Chart to initiate the order
Reminder: We will use a buy order for this, but the Step to Market order can also be used to sell or close a position.
2. Select the Buy {Sym}... choice in the menu to initiate a Limit order
This opens an on chart order ticket
3. Click the Limit Basis drop down
Set the Step from field. The Step to Market order can be initiated from the Bid (on the buy side) or the Mid (midpoint of the bid/ask spread).
Then select Step to Mkt
4. Place the order
The on-chart order ticket now show the Step to Market order
Click Buy {Sym} and then Place Order in the confirmation window
5. The Step to Market order will now Auto-Modify
The initial limit order will be placed as specified (in this case at the mid-point of the spread). Then the order will be modified up toward the Market. If the limit price is filled somewhere prior to reaching the market, you may receive a preferable fill price. If the limit order is not filled, then the order will go to the current market price to be filled.
The trading tools work on either a LIVE brokerage account or a PAPER (simulated) trading account. Live market trading requires an account with TC2000 Brokerage. Click Here for more.
Note: One disadvantage of stepping toward the natural (and/or market price) is that if the market moves against you while stepping, you could get a worse price than if you had just bought at the market initially.