Why does my order get split into multiple trades?
When you place a trading order with FYERS, occasionally you might observe that it gets executed in segments, each at distinct prices and timestamps. This phenomenon is termed as order splitting. It is a consequence of several intricate factors that steer the order matching mechanism on stock exchanges.
Key Causes for Order Splitting:
Bid-Ask Spread: This spread refers to the variance between the highest figure buyers are prepared to shell out and the lowest price sellers are ready to concede for a stock. When there exists a vast disparity between a stock's demand and supply, it's probable that your order might not be executed at the desired price or quantity you anticipated.
Order Queue: This represents the series of orders in line, awaiting execution on the stock exchange. It operates on a 'first come, first serve' principle, implying orders get matched in the order they reach the exchange. If numerous orders precede yours, it's likely your order might experience a delay or may be filled partially.
Market Volatility: Represents the extent of price and volume variations of a stock. In scenarios where market activity is pronounced and fluctuating rapidly, your order could be executed at varying prices as the stock value shifts incessantly.
For example, consider that you wish to acquire 1000 shares of Tata Motors Ltd. at the prevailing market price (LTP: ₹500) using a regular trade/invest order. Post order placement, you find it executed in three distinct trades - quantities of 400, 300, and 300 shares respectively, at prices of ₹500.10, ₹500.25, and ₹503.30. This exemplifies that your initial order fragmented into three segments, each filled at different rates in alignment with changing market prices.
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