I have a position open, I want to exit first thing tomorrow morning. What guarantees faster execution, placing a market order using AMO option, or just placing a market order immediately when the market opens?
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The AMO order will execute faster because orders execute on a PRICE-TIME priority. Since its a market order, price is irrelevant but the time stamp on AMO is prior so it will get the preference and executes before the live market order.
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What is faster is placing a market order as soon as the market opens at 9.15am.
In India exchanges don’t store orders on their server. So what this means is that in an after market order, the brokerage collects all the orders and sends it to the exchange once the market opens at 9.15 am. So assuming there are 1000 AMO’s placed by all clients at a brokerage, a file is generated before market opening, and at market opening this file is uploaded to the terminal and in turn to the exchange. When this file is uploaded, all AMO orders are sent sequentially. Orders are fired in milliseconds, but this could still take time if there are thousands of orders in AMO.
There is also a slight risk that the broker updating the file to the terminal could happen a few seconds after 9.15am. Also what you need to consider is that when the market opens lakhs of orders get fired from people from everywhere. Exchanges have the capacity to handle only 50,000 orders per second. So your order execution first thing at 9.15am is kind of luck of draw, no way to get the best/first price.
So if you want the price fastest at market opening, place a market order as soon as the market opens instead of using an AMO.
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Nithin, if the orders are with the broker and not the exchange then why does the exchange not allow the broker to set GTC & GTD orders. Brokers can handle these too like AMO orders
Currently what ICICI and a bunch of others who offer Valid till cancel orders, they all do it this way itself. But it is a very hacky way to do it. Place orders, come back after market closing and see the status of all the VTC orders that were placed. If it is pending, re-place it again. Ideally if exchanges supported it, that is the best way to do it.