Order Management System

Market orders execute immediately at current price - you get speed but no price control. Limit orders only execute at your specified price or better - you get price control but may not fill. Use market for urgency; limit for price sensitivity.

Limit orders only fill at your price or better. If the stock never reaches your limit price, it won't fill. For a buy limit, the stock must trade at or below your limit. Check if your limit was too far from market or if there wasn't enough volume at your price.

Orders placed after hours are typically queued for the next trading day. They'll activate when the market opens. Some brokers offer extended hours trading (pre-market and after-hours) but with limited liquidity and wider spreads.

A day order is valid until the end of the current trading day (4:00 PM ET for TSX). If not filled by market close, it automatically expires. You'll need to re-enter it the next day if still wanted.

T+1 means trade date plus one business day. If you sell stock on Monday, the trade settles (completes) on Tuesday. Until settlement, the proceeds aren't fully available. For buying, you need funds available by settlement.

Stop-market: After trigger, executes at market - guaranteed fill but possibly bad price if gaps. Stop-limit: After trigger, only executes at limit or better - price control but may not fill in fast markets. Use stop-market for definite exits; stop-limit if prefer no fill over bad fill.

Use limit orders instead of market. Trade liquid stocks with tight spreads. Avoid trading during volatile moments (open, close, news). For large orders, scale in/out over time. Don't chase fast-moving prices. Consider execution algorithms for large orders.

One-Cancels-Other links two orders so when one fills, the other automatically cancels. Common use: profit target and stop loss - whichever triggers first cancels the other. This automates exit management and prevents both from filling.

Your OMS/broker should track this automatically. For multiple buys: Average Cost = Total $ Spent / Total Shares. Example: 100 shares at $50 + 50 shares at $52 = $7,600 / 150 = $50.67 average. This is used for P&L and tax calculations.

Smart routing automatically sends your order to the best available venue (TSX, alternative exchanges, dark pools) based on price, speed, and likelihood of fill. It helps achieve best execution without you manually selecting venues.

VWAP algorithms aim to execute at or better than the day's VWAP. They predict the volume profile and spread orders throughout the day to match it. More volume expected = more of your order. This minimizes market impact and achieves benchmark-close execution.

Implementation shortfall = cost of execution vs instant paper trade. Components: delay cost (price moved while you waited), market impact (your trading moved price), opportunity cost (unfilled orders). Minimize by: trading quickly when alpha is time-sensitive, using algos for large orders, choosing urgency level based on trade-off.

Submit as a spread order (single order for all legs) rather than legging in separately. If must leg: execute riskier leg first (the one that creates more exposure if unfilled), watch closely, have contingency plan. Use limit prices that allow both legs to fill.

Price bands (reject if too far from market), quantity limits (max shares per order), notional limits (max dollar value), buying power check, position limits, confirmation for large orders. Also: rate limits to prevent runaway algorithms, kill switch for emergencies.

Compare fill prices to benchmarks: VWAP (were you better or worse?), arrival price (how much slippage from decision?), implementation shortfall (total cost). Track metrics over time: average slippage, fill rate on limits, time to fill. Identify patterns and areas for improvement.