OPENING GAP

While discussing the different types of orders, it is worth to mention how they are executed in the event of a market opening with a gap (the opening price of the market in a given session differs from the closing price of the previous session).

In such a situation, both Limit and Stop orders will be executed at the first available price that occurs in the market, meeting the conditions for activation of the order. The individual types of orders will be discussed using the following examples:

a) SELL ORDERS

DE30 ended the trading session at BID/ASK 12500.0/12501.0

Sell Limit order for 10 lots, set at 12550.0

SCENARIO 1:

DE30 opens at BID/ASK 12600.0/12601.0 with liquidity available as shown in the image below:

A Sell Limit order for 10 lots is executed in full at the volume weighted average price of 12599.8 (BID)

SCENARIO 2:

DE30 starts a new session at BID/ASK 12600.0/12601.0 with 5 lots of available liquidity:

The next price (new tick) is BID/ASK 12601.0/12602.0 with available liquidity of 10 lots:

A Sell Limit order is executed in full, yet in two parts: 5 lots at 12600.0 and 5 lots at 12601.0

SCENARIO 3:

DE30 starts the new trading session at BID/ASK 12551.0/12552.0 with available liquidity of 5 lots:

The next price (new tick) is BID/ASK 12549.0/12550.0 with available liquidity of 10 lots:

A Sell Limit order executes in parts: 5 lots at the price of 12551.0. The remaining 5 lots will be executed when the price again reaches the BID of 12550.0 or higher. The unexecuted part remains an active pending order.

Sell stop order for 10 lots, set at 12450.00

SCENARIO 1:

DE30 starts the new trading session at BID/ASK 12400.0/12401.0 with available liquidity as in the example below:

Sell stop order is executed in full at the volume weighted average price of 12399.7 (BID)

SCENARIO 2:

DE30 begins new trading session at BID/ASK 12400.0/12401.0 with available liquidity of 5 lots :

The next price (new tick) is BID/ASK 12399.00/12400.00 with available liquidity of 10 lots:

The Sell Stop order executes in full, but only at 12399.0, as the liquidity available at the previous tick was insufficient for execution.

SCENARIO 3:

DE30 starts the new trading session at BID/ASK 12449.00/12450.00 with available liquidity of 5 lots:

The next price (new tick) is BID/ASK 12451.00/12452.00 with available liquidity of 10 lots:

There is insufficient liquidity available at the price that meets the activation condition. The order is not executed but remains active as a pending order and will be executed when there is a new price that meets the activation condition with sufficient liquidity.