Sweep-To-Fill Order Definition (2024)

What is a Sweep-To-Fill Order?

A sweep-to-fill order is a type of market order in which a broker splits the order into numerous parts to take advantage of the order sizes at the best prices currently offered on the market. A sweep-to-fill order is executed immediately based on the best possible price and allows the investor to enter a trade as soon as possible. Sweep-to-fill orders can have limits (limit order) attached to them, which controls the highest price paid to buy, or the lowest price sold at.

Key Takeaways

  • A sweep-to-fill order is a type of market order that fills by taking all liquidity at the best price, then all liquidity at the next best price, and so on, until the order is filled.
  • It does this by breaking the order up into multiple pieces for each price and volume amount.
  • Because exchanges and ECNs in the U.S. are so interconnected and are all used to create the best bid and offer available on the order book, traditional limit orders are typically just as effective for executing quick trades on behalf of the retail trader.

Understanding the Sweep-To-Fill Order

The order looks first at price and then at the available liquidity at each price. If a trader needs to sell 100,000 shares and wants to use a sweep-to-fill order, the order will look for the highest available price (usually the best bid price) across all available exchanges, and the amount shares available at that price. If 100,000 are not available for sale, it will then look to the next highest price and the shares available there, and repeat this process until the full order size is able to be filled.

In some heavily traded stocks such an order would not significantly change the price by its execution. However in thinly traded stocks, those that trade less than 100,000 shares per day on average, such an order could create a substantial move down in the stock's price. Consequently brokers and traders are careful about the use of such an order.

It does this until the whole order should be filled, and then sends out individual orders for each price and share amount.

While this is similar to a market order in that the order is trying to take all liquidity until the order is filled, a sweep-to-fill order can have a limit attached to it, controlling how far the order searches for liquidity. For example, if a trader has a large position they want to buy, they may want to buy as much as they can but only up to a certain price. They could use a sweep-to-fill order to do this.

Sweep-to-fill order processing is more common with large orders. Retail investors need to specify the use of a sweep-to-fill order if they wish to transact in this way, and not all brokers offer this order type.

Sweep-To-Fill Order Processing

Sweep-to-fill orders are facilitated by broker-dealers with technology for accessing a broad range of exchanges and trading venues called electronic communication networks (ECNs). In a sweep-to-fill order, a broker-dealer will fill the order at various market prices providing the investor with an average buying price.

Most broker-dealers have technology systems linked to all the major exchanges, electronic communication networks (ECNs), and some may access dark pools as well. When an order is placed, it is sent to all of the exchanges in the broker’s network to grab all the available liquidity, starting at the best price, and taking liquidity at successively worse prices until the order is filled. Alternatively, the order will do the above until the limit price set on the order is reached.

No Longer a Necessary Order

This order type isn't used much by retail traders. The exchanges are so interlinked, and any exchange or ECN in the U.S. posting a visible order will show up on the order book for that stock. An order cannot be filled at a price outside the best bid or offer. While the bid or offer can change, another one will be shown, and then transactions can't occur outside those levels until all those shares are gone and then a new bid/ask price is revealed.

In this way, any limit or market order will sweep the book, because it takes all shares at the best available price, and then moves to take all the shares at the next best price, and so on, until the order is filled.

That said, some brokers still offer this order type. While most retail investors will find little benefit to it over and above using traditional limit or market orders, some institutional investors may find it incrementally improves their execution price but that is by no means guaranteed. Institutional investors will typically test out order types to see which provides the better execution rate over many trades, and then will gravitate toward the more efficient types.

Example of a Sweep-to-Fill Order

Assume a trader is interested in buying Ali Baba Inc. (BABA), and wants to get into the trade right now. They want to buy 10,000 shares. The price is oscillating around $160.60, but there is only about 500 shares usually showing on the order book at each price level. Bigger, or smaller, liquidity may pop up at different prices though. A sweep-to-fill order will look at all available liquidity and then send out orders to grab all the available liquidity at the different price levels until the order is filled.

Assume the trader adds in the additional stipulation that they want to limit their buying to $160.70.

There are 500 shares posted at $160.61, 1,200 shares at $160.62, 900 at $160.63, 200 at $160.64, 5,000 at $160.65, 500 at $160.66, 1,000 at $160.67, and 2,000 at $161.68.

The sweep-to-fill order looks at all these prices and volumes and then sends out an order for each price and volume amount. It will take all the shares at all the prices until it fills, so it will only take 700 at $161.68 instead of the full 2,000 available. This is because if it gets all the other shares prior, it will reach the 10,000 required shares with only taking 700 at $161.68.

Another simple example reveals why this order type is not used frequently in modern markets. The sweep-to-fill is breaking an order up, but orders can't be filled outside the best bid/offer. Assume that someone is only showing they are offering 500 shares at $161.61, but they are in fact using an iceberg order and have 50,000 shares offered there.

The sweep-to-fill hits a roadblock in that all those orders at different prices are useless until the prices of those orders are reached. Therefore, most brokerage software will realize there is liquidity at the $160.61 and continue to fill the order at the best price available ($160.61 currently) until it is filled. This is also how a limit order works. The trader could have set a buy limit up to $160.70 and the order would have taken all liquidity at the best price available until the 10,000 shares were filled.

Sweep-To-Fill Order Definition (2024)

FAQs

Is a Call sweep bullish or bearISH? ›

A Sweep purchase (several small orders placed by one trader instead of a single large order) of a Call is referred to as 'bearISH' because those trades were executed at the BID price rather than the ASK price.

What is the difference between split and sweep options? ›

Split orders function the same way as sweep orders. The only difference is that split orders are filled on a single exchange whereas sweep orders are filled across multiple exchanges.

What is a sweep in options flow? ›

An option sweep is a market order that is split into various sizes to take advantage of all available contracts at the best prices currently offered across all exchanges. By doing so, the trader is “sweeping” the order book of multiple exchanges until the order is filled completely.

What does fill the order mean? ›

For example, if a trader places a buy order for a stock at $50 and a seller agrees to the price, the sale occurs, and the order fills. The $50 price is the fill or execution price.

What is the difference between a trade and a sweep? ›

A block trade is a privately negotiated transaction, with variables such as shares and position balancing at play. A Sweep trade is an aggressive transaction broken up and sent across multiple exchanges.

What is the most bullish option strategy? ›

Buying a call option is considered to be the most bullish options strategy. This strategy gives the buyer of the call option the right but not the obligation to buy a security at a specific price at a specific time.

What are the types of sweep? ›

  • Glide Sweep. A glide sweep (or chirp) is a continuous signal in which the frequency increases or decreases logarithmically with time. ...
  • Stepped Sweep. In a stepped sweep, one variable input parameter (frequency or amplitude) is incremented or decremented in discrete steps. ...
  • Time Sweep. ...
  • Table Sweep. ...
  • See also. ...
  • References.

Is a sweep bullish? ›

If a Sweep on a Call is BEARISH, this means the Call was traded at the BID, in turn, this means someone most likely wrote the Call or sold the Calls they were holding at the bid (getting rid of the options as fast as possible). If a Sweep on a Call is BULLISH, this means the Call was traded at the ASK.

Is a sweep account a good idea? ›

If you run a business that typically has a high deposit balance, a sweep account can help you get the most out of your money. It can help you earn higher interest on your cash and pay off your loans quicker. Just make sure you calculate your business loan payments and are aware of any risks or fees.

What is a sweep vs block order? ›

Simply put, a sweep is a much more aggressive order than a block. A block is often negotiated and can be tied to stock. Sweeps are aggressive orders filled across multiple exchanges and more likely to be a directional bet on the underlying stock.

What is a Call sweep order? ›

A call sweep is an options trading strategy that involves the simultaneous purchase of a large number of call option contracts. The purpose of this strategy is to "sweep" up as many option contracts as possible as quickly as possible.

What are sweep operations? ›

Sweep operation allows creating a solid body by sweeping a contour along a spatial path. This operation belongs to the family of so-called "kinematic" operations, as it results in creating a body swept by the original contour as the latter is moved along a guiding path.

How long does a mail order company have to fill your order? ›

The 30-day window begins when the business receives a completed order and payment.

What process would you use to fill a customer order? ›

Understanding the order filling process can help you manage the way your company delivers items to customers.
...
However, here are the four main steps in the order filling process:
  1. Inventory reception. ...
  2. Warehouse picking. ...
  3. Item packaging. ...
  4. Order shipment.
Aug 18, 2021

How do brokers fill orders? ›

Your broker may route your order -- especially a limit order -- to an electronic communications network (ECN) that automatically matches buy and sell orders at specified prices. Your broker may decide to send your order to another division of your broker's firm to be filled out of the firm's own inventory.

What are the risks of a sweep? ›

The procedure may cause some slight discomfort, slight bleeding or a 'show' and/or tightening of the womb. All of these are normal, and will not cause any harm to you or your baby. It will not increase the chance of your baby getting an infection. Membrane sweeping is not recommended if your waters have broken.

How often is a sweep successful? ›

One study showed that 90% of those who had a membrane sweep gave birth by 41 weeks compared to 75% who did not have the procedure. Membrane sweeps are a safe and effective way to start labor in most people. While slightly uncomfortable, they can be a great first attempt at getting labor going naturally.

What happens if a sweep is successful? ›

If the membrane sweep is successful you will usually go into labour within 48 hours. Having 2 or even 3 membrane sweeps 48 hours apart is the most successful in encouraging labour to start.

What is the most risky option strategy? ›

Selling naked calls is the riskiest strategy of all. In exchange for limited potential gain, you assume unlimited potential losses.

What is the safest option trade? ›

Straddle is considered one of the best Option Trading Strategies for Indian Market. A Long Straddle is possibly one of the easiest market-neutral trading strategies to execute. The direction of the market's movement after it has been applied has no bearing on profit and loss.

What is the most consistently profitable option strategy? ›

One strategy that is quite popular among experienced options traders is known as the butterfly spread. This strategy allows a trader to enter into a trade with a high probability of profit, high-profit potential, and limited risk.

Why is it called a sweep? ›

One possibility is that the usage comes from the image of using a broom to sweep your opponent out of the way — that opponent put up so little fight that you could use the broom instead of having to pull a mop out or get on your hands and knees to scrub.

What is the example of sweep? ›

Verb He swept the dirt off the driveway. He swept the crumbs from the table. I need to sweep the kitchen.

What is the 3 form of sweep? ›

swept - Simple English Wiktionary.

What is the most bullish pattern? ›

What Is the Most Bullish Candlestick Pattern? The bullish engulfing pattern and the ascending triangle pattern are considered among the most favorable candlestick patterns. As with other forms of technical analysis, it is important to look for bullish confirmation and understand that there are no guaranteed results.

What is the most bullish stock pattern? ›

The ascending triangle is a bullish continuation pattern which signifies the continuation of an uptrend. Ascending triangles can be drawn onto charts by placing a horizontal line along the swing highs – the resistance – and then drawing an ascending trend line along the swing lows – the support.

Can you demand a sweep? ›

Contescu says some women even request a stretch and sweep to help get labour started, particularly if they have a history of going past their due date. It's a completely optional procedure—even if your caregiver suggests it.

What are the disadvantages of a sweep account? ›

Penalty charges: The chief disadvantage of sweep accounts remains the penalty charged, if any, on the premature withdrawal. In unfortunate cases, you may earn even less than saving bank interest due to the penalty.

Why did my money go to a sweep account? ›

A sweep account moves excess funds between a checking account and a higher interest-earning account. This transfer happens at the end of every business day when there is an excess amount of funds available. If there is no excess, the money is not swept into the other account.

Why is my money in a sweep account? ›

A sweep account is a brokerage or bank account that, at the close of each business day, automatically transfers funds that surpass or fall short of a certain threshold into a higher interest-earning investment option. The excess cash is usually swept into a money market fund.

What is a sweep contract? ›

A sweep arrangement is designed to give you the opportunity to automatically invest excess funds from your commercial checking account. Excess funds are invested in a Sweep/Repurchase Agreement which offers a higher return on your daily operating cash.

What are sweeps in construction? ›

However, the 2018 International Residential Code (IRC), published by the International Code Council (ICC) defines a sweep as: 'A drainage fitting designed to provide a change in direction of a drain pipe of less than the angle specified by the amount necessary to establish the desired slope of the line.

What does a block order mean? ›

Block order refers to the placing of order either for a sale or a purchase of a huge number of securities. In contrast to retail trades for a small quantity of shares, such as few hundreds or thousands, a block order consists of orders, such as few lakhs to few crore shares in number.

What are sweep alerts? ›

Sweep: This means there is a large order than is broken up into smaller orders. This helps the order get filled quicker. In the options alert, this will be followed by the number of sources.

What does it mean when calls sweep near the ask? ›

Sweep orders may indicate that the trader is prioritizing execution speed over price, a sign that he or she thinks the stock could start moving in a hurry.

What is the purpose of sweep? ›

verb (used with object), swept, sweep·ing. to move or remove (dust, dirt, etc.) with or as if with a broom, brush, or the like. to clear or clean (a floor, room, chimney, etc.)

What are the two types of sweep operations? ›

Fixed Sweep is a section curve moving along a guide path while fixing the orientation of the section curve. Parallel Sweep is defined as a section curve moving along a guide path while maintaining the section curve to be parallel to the guide path.

What does sweep in mean? ›

The “sweep-in" facility allows your bank to transfer any sum in excess of the amount stipulated by you from your savings account to a sweep-in deposit. The tenure of the deposit varies from one year to five years, and the interest rates also vary accordingly.

Can I sue a company for not sending me my order? ›

So long as there isn't another court better suited to hear the case, then the lawsuit can be filed in small claims. Suing for an item you purchased but didn't receive is a common small claims court lawsuit.

Is it illegal to keep a package accidentally delivered to you? ›

You have the legal right to keep it as a free gift, according to the Federal Trade Commission (FTC). Sellers aren't permitted to ask for payment for unordered items, either, and the FTC says consumers are under no obligation to even tell the seller about the wrongly delivered merchandise.

What is the 30 day rule in shipping law? ›

The Rule, issued in 1975, requires sellers who solicit buyers to order merchandise through the mail, via the Internet, or by phone to have a reasonable basis to expect that the sellers can ship within the advertised time frame, or, if no time frame is specified, within 30 days.

What are the six steps in the order fulfillment process? ›

Here's an overview of the order fulfillment processing steps:
  1. Receiving inventory shipments.
  2. Inventory storage.
  3. Order processing.
  4. Shipping.
  5. Returns processing.
Sep 17, 2022

What are the five steps in processing an order? ›

An order-processing workflow usually contains the following five steps.
...
The steps to successfully process orders
  1. Placing an order. ...
  2. Picking the product. ...
  3. Sorting products. ...
  4. Packing the product. ...
  5. Shipping the product.
Jan 2, 2023

What does fill an order mean? ›

Order filling refers to the process of receiving and storing inventory, and picking, packing, and shipping each order. It is also known as order fulfillment and is comprised of the steps needed to send a customer their online order.

Which broker has the fastest execution? ›

For everyday investors, Fidelity offers the best order execution quality. For professional traders, Interactive Brokers, under the IBKR Pro commissions plan, offers the best order execution quality.

Do market orders fill immediately? ›

Market Orders: Immediate Fills

A market order in a liquid stock such as Apple (AAPL) or Meta (META), formerly Facebook, is almost always filled and confirmed immediately. However, an order with a smaller, less-liquid stock may take longer to fill and receive confirmation from a broker.

What is a bullish sweep call? ›

If a Sweep on a Call is BULLISH, this means the Call was traded at the ASK. The buyer was aggressive in getting filled and paid whatever price they could get filled at. If the trade has Neutral Sentiment the trade was made at the mid (or middle of the bid and ask price)

What does a calls sweep mean? ›

A call sweep is an options trading strategy that involves the simultaneous purchase of a large number of call option contracts. The purpose of this strategy is to "sweep" up as many option contracts as possible as quickly as possible.

Can a call option be bearish? ›

A covered call is bearish when the trader sells calls deeper in the money because they have significant delta. This can completely offset the downside in the stock price, up to a certain point.

What is the best option selling strategy? ›

A Bull Call Spread is made by purchasing one call option and concurrently selling another call option with a lower cost and a higher strike price, both of which have the same expiration date. Furthermore, this is considered the best option selling strategy.

What is the best bull call spread strategy? ›

A Bull Call Spread strategy involves Buy ITM Call Option + Sell OTM Call Option. For example, if you are of the view that Nifty will rise moderately in near future then you can Buy NIFTY Call Option at ITM and Sell NIFTY 50 Call Option at OTM.

What is a golden sweep in options? ›

So, what is a Golden Sweep? -- This is unique to our system. It's basically a very large opening sweep order. These orders are highlighted on our dashboard automatically as they are placed.

What is the difference between the bid and ask price? ›

The term "bid" refers to the highest price a buyer will pay to buy a specified number of shares of a stock at any given time. The term "ask" refers to the lowest price at which a seller will sell the stock. The bid price will almost always be lower than the ask or “offer,” price.

What is a whale alert for stocks? ›

This whale alert can help traders discover the next big trading opportunities. Whales are entities with large sums of money and we track their transactions here at Benzinga on our options activity scanner. Traders often look for circ*mstances when the market estimation of an option diverges away from its normal worth.

What happens if my call option hits the strike price? ›

Call options are “in the money” when the stock price is above the strike price at expiration. The call owner can exercise the option, putting up cash to buy the stock at the strike price. Or the owner can simply sell the option at its fair market value to another buyer before it expires.

What is the safest option strategy? ›

What are the safest options strategies? Two of the safest options strategies are selling covered calls and selling cash-covered puts.

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