What is Partially Matched Order Status in Philippine Stock Market?
In this blog we’ll go one step deeper and have a look on partial matching of stock orders.
Factors in Order Matching
There are basically two factors being considered by a stock market for your order to be matched (fully or partial) – the price and the volume.
Here are the two simple rules:
First, no order matching will ever occur unless there’s an agreement of price.
Second, once the equality of price of buyer and seller is met, the order matching will occur until the entire volume of one side of the transaction is fully done.
As a result of this, there are times when not enough volume of orders is available and willing to match your order at your specified price.
In that case, your order becomes partially matched.
You can actually trace how your order gets fulfilled in a stock market during the actual trading hours.
Let’s look at this one simple experiment I did.
First, I posted a usual order in the order entry screen of my online broker COL Financial
I put a sell order of 700 shares of SMPH at 14.16.
Obviously, I was not the only one selling SMPH at that price. In fact, my 700 shares were very tiny compared to thousands of other shares being sold by other big-time sellers.
But stock market plays no discrimination. Whether you’re a big investor or a small cute investor (HAHA!), it treats you the same.
The price of SMPH played around 14.14-14.16 that time.
After some time of waiting, when the prices started to reach 14.16, it finally matched my order price and thus my order becomes fulfilled.
However, only 100 shares was initially matched.
This is also reflected in the order status showing the number of shared still unmatched and waiting.
After more time of waiting, another 100 shares were matched, totaling to 200 shares at 14.16 price.
I also checked this on the latest transaction for the SMPH stock. Since I used COL Financial as my stockbroker, it would appear as the seller.
Did you see what effectively happened?
At 9:37:18 (seven minutes after the market opened) my 100 shares were matched.
Seven minutes after at 9:44, the second 100 shares were matched.
If you noticed, there had been other orders at 14.16 that were matched prior to my 100 shares. Those were the other sellers who were able to put their orders at an earlier time than I did.
Because we had same price in our selling orders, the trading system wouldl follow the first-come-first-served basis.
The remaining 500 shares remained unmatched.
That 500 was part of the 16700 shares in the queue at the price of 14.16 in the quote above.
And since I was already first in the line, that means there were 16200 shares waiting behind me.
Any buyer at that price would automatically get the holdings I was selling.
I decided to simply wait again this time.
But after more time of waiting, a certain seller gave up and put a sell order at a much lower price of 14.14.
And since it has lower selling price, it gets prioritized in the order matching process, thus taking my place.
A buyer of 200 shares matched his order. I suspect that the remaining 800 shares at 14.14 in the Ask Column was that same seller.
Unfortunately, during the rest of the trading hours, no more buyers were willing to buy at 14.16.
At the end of that trading day, only 200 shares of my order were just matched. The 500 went back to my portfolio.
A view of the order status would show the same.
We can go back to the transactions of SMPH and see where my two 100 shared order were placed during that day. From below, they were at 299th and 300th transactions.
So that day, my order was only partially executed.
In the final trading confirmation sent thru email, the two partially-matched orders were treated as one 200-shares sell order.
Hope this helps in your understanding of actual order matching and in coming up with your strategy when it comes to a more active trading.
Have fun investing! (even with partial matching!)
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