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v101

Ghost orders

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I happen to be watching a video and the shop was discussing putting ghost trade orders in, where they dont actually show up.

There was some various discussions about this a while back.

 

For my own education, could someone help me to understand this better how these are entered and the orders filled?

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I haven't seen or heard of ghost orders being available on retail platforms, but it's available on our institutional trading platform where I work and we use it here and there.

 

It completely hides an order and will only trade if the market goes bid or offered at the price you want to sell or buy respectively.

 

E.g. market is 6/8 and I want to buy 7's without showing my bid, i enter a ghost order to pay 7 on 100 lots, market is still 6/8, someone offers 50 @ 7 and i immediately buy them, market instantly returns to 6/8.

 

Useful in some situations, sometimes a trader might not want to display their order in a market and keep their trading on the down-low.

 

If you are the best/bid offer sometimes switching from a limit to a ghost will cause algos to go bid or offered at your level and you can immediately pick up some contracts that you wouldn't otherwise.

 

Market-makers seem to use them quite a lot particularly on options, so the screen price might be 5/9 but the true price may be 6/8 via ghost orders.

 

Hope that helped.

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  mblack246 said:
I haven't seen or heard of ghost orders being available on retail platforms, but it's available on our institutional trading platform where I work and we use it here and there.

 

It completely hides an order and will only trade if the market goes bid or offered at the price you want to sell or buy respectively.

 

E.g. market is 6/8 and I want to buy 7's without showing my bid, i enter a ghost order to pay 7 on 100 lots, market is still 6/8, someone offers 50 @ 7 and i immediately buy them, market instantly returns to 6/8.

 

Useful in some situations, sometimes a trader might not want to display their order in a market and keep their trading on the down-low.

 

If you are the best/bid offer sometimes switching from a limit to a ghost will cause algos to go bid or offered at your level and you can immediately pick up some contracts that you wouldn't otherwise.

 

Market-makers seem to use them quite a lot particularly on options, so the screen price might be 5/9 but the true price may be 6/8 via ghost orders.

 

Hope that helped.

 

Is it same as Toxic flow which is normally rejected by banks??

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