Commodity Futures Order Types

 


MOO (Market on Open)


The market on open order type was born in the trading pits. Originally, it was an instruction to buy or sell a commodity futures contract on the open of the pit trading session. However, electronically executed futures markets have really changed the landscape of this type of trading because speculators are now able to place futures orders around the clock. There is no longer a morning “open”, or at least not an official one. Instead, most commodities open for trade in the afternoon prior to the day the trading session closes. To clarify, the futures markets open on Sunday night, and trade through Monday afternoon. On Monday afternoon, they close for a brief period (an hour or two for most futures contracts), then open back up for trading. The Monday afternoon re-open is considered Tuesday’s trading session.Commodity Market News


Because of this change in logistics and timing, MOO orders have mostly dropped off most futures trading platforms. However, some trading platforms offer “timed” orders in which commodity traders can establish an order to buy or sell a futures contract using a market order at a time just after the open of trade, or at the time in day in which the open outcry trading pit previously opened when it was in operation.

MOC (Market on Close)


A market on close order is one in which the trader wishes to buy or sell a futures contract at the close of a trading session. Similar to the market on open designated order type, the MOC order is far less common in an electronic trading world but some platforms are capable of imitating the order type through “timed orders” which are released by the platform at a time of the day specified by the trader entering the futures order.


TAS (Trade at Settlement)


The trade at settlement (TAS) order type is essentially the new MOC order for the futures markets. A TAS order is placed by traders who wish to buy or a sell a commodity futures contract at the settlement price of the current trading session. A Trade at Settlement order is unique relative to the Market on Close because it gives futures traders the opportunity to name the acceptable fill slippage. This is necessary because it might not be possible to fill all of the TAS orders at the actual settlement price. Don’t forget, for every buyer of a futures contract there is a seller; therefore, in order for a TAS order to be filled at the settlement price of a commodity, another trader must be willing to take the other side of the trade at that price. Accordingly, TAS orders can be placed at 0, +1, or +2 (or at -1, or -2) to designate the number of ticks above or below the settlement price the trader is willing to accept as a fill price.

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