Strange bid order

[swakoo]

Quite often I saw the bid and offer prices changed systematically and kept repeating it.
e.g. bid 0.655 offer 0.66 , changed to 0.65 and 0.655 respectively , and it revert back again and vice versa.

What time did u observe this?

If it is 8.30-8.59am or 5-5.05pm, it is par for the course. Part of market open or close routines. Orders are aggregated as they are entered (or removed) but not executed yet until the final minute. Hence the cycling of bid/offer levels.

[Temperament]

My experience is even when i put in my order overnight before SGX opens, i may not get my Buy/Sell orders done. Especially for stocks like Singapore Post, SMRT, SPH. It seems a lot of Ques in front of me. Who are they? Institutional's algorithmic/ HFT computers or what? And this happens quite often. This is where ikan bilis are no match to the sharks.

For this I have a rough answer.

Firstly, not all houses are the same. For parked orders, your order is queued at your brokerage's system. It should have just cleared the OMS and waiting only to fire the order to SGX when the gateway opens next morning.

I am sure you know that there is a difference between accessing a website in Singapore and another in say Malaysia due to geographic distance. Extra length of wire means extra time even in the millisecond.

The same goes for the brokers. Different connection quality, different OMS performance. All else being equal, whoever is "nearer" to SGX would have the slight advantage be be ahead in the queue.

Into the picture also comes the co-location service offered by SGX. Essentially the broker's systems are placed in SGX's data centre. This means a definite advantage since it is within the same room/building instead of across the island. If your broker has the OMS in SGX's data centre, you have some serious advantage.

Another consideration is the "service plan" that your broker subscribes to SGX. Some have 20 orders per second, others could have 60 orders per second.

Then add in the customer base of your broker. If your broker is Kay Hian or Phillip which has the largest customer base, then naturally they would have a lot of orders to fire.

Where are you in the queue? Supposed you're order 190 and the connection is 60 orders/s. Your order would at best be fired at the 3rd sec simplistically speaking. But if you're with a much smaller assume DMG, you could be order 30, and even with a connection of 20 orders/s, your order would reach SGX on the 2nd sec!

So IT investment by your broker plays a part other than the commission rate. Bear in mind this is only the retail brokers. Investment banks and institutional traders would have invested more into their technology to allow their trades to be executed faster.

AT and HFT are of course another topic and ball game altogether.

For broker assisted trading, you pay higher commission but you get likely faster execution reason being when they place an order, it goes directly to SGX. Compared to Internet trades which is less efficient due to internal flows and needing to clear OMS, etc.

That's the theory behind, and unless there are people who are willing to test the performance of every broker, which offers queue advantage is unknown.

To test this, you need to have Internet trading accounts with a few brokers, prepare the same order at all broker's Internet trading platform, and all hit submit at the same time and then see which order gets fulfilled first. But I'm not sure if every broker takes in overnight orders at the same time after market close though.

i suspect what you say has some truth. i have tried a few different local brokers (not exactly what you propose) but it seems we ikan bilis can never beat the sharks. It seems my B/S orders are executed only when The Sharks have eatened and are picking their teeth. Sometimes i miss altogether. Sometimes it takes a few days to a week. It's O. K. as long as i get what i want sometimes.