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  #1  
Old 5th March 2013, 10:03 AM
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Default Advantages of Disclosed Quantity Field?



While making a trade, you have an option to break it up into a series of smaller buys via the disclosed quantity field. What is the advantage of doing this? Is this an advantage only in day trading?
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Old 6th March 2013, 09:45 AM
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Disclosing an order partially is useful when the order is much larger than other orders in the order book.

e.g. Suppose a mutual fund wants to sell 20,000 shares of Infosys.

If the mutual fund places a single sell order of 20000 shares, buyers would realize that there is a large seller in the market and move down or cancel their buy orders. Also other sellers would panic and move their sell orders down too.

This would take the stock price down and make it difficult for the mutual fund to sell all the shares without significant price erosion.

On the other hand, if only 2000 shares are disclosed, most buyers/sellers wouldn't bother about the order.

Partially disclosing an order is useful when the sell/buy quantity is much larger than the other orders in the order book. It is equally useful for day trading and delivery trading.
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Old 6th March 2013, 10:21 AM
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Thank you. Any dis/advantages for the small players?
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Old 6th March 2013, 03:07 PM
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What you see is not what you get, so any player whether large or small shouldn't give too much importance to disclosed quantity, it just clouds your perception of demand and supply.

This is a psychological game between various market participants, each trying to get the better of the other in any way they can.

Last edited by kris_mar : 6th March 2013 at 03:18 PM.
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Old 14th March 2013, 01:41 PM
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While I'm not entirely sure on this, I think using disclosed quantity can affect the buying and selling queue. In other words, if you are buying 400 shares with a disclosed quantity of 100 shares, I have an inkling that only your first 100 shares are queued first. The subsequent lots are perhaps not queued immediately after or perhaps are only queued after the first lot has been successfully bought.

A grain of salt is recommended.
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Old 14th March 2013, 06:06 PM
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Quote:
Originally Posted by DineshV View Post
perhaps are only queued after the first lot has been successfully bought.
That is correct.

The second order (for 100 shares) will be fed into the order book only after the first order has been fully executed.
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