This article explains why you might be able to place a limit order when the stock market is closed, but have the exact same order rejected when the market is open, especially when the limit price is very far from the current market price.
The "TooFarFromMarket" error you sometimes see is generated directly by our broker, Saxo. It is not part of our app's (IVS) specific rules or guidance. Therefore, we need to look at Saxo’s policies to understand this behavior.
Saxo confirms that this is their expected procedure: they only generate the "TooFarFromMarket" error during the trading session when they have a current, active market quote available.
When the Market is OPEN: If you try to place an order with a limit price that is completely unrealistic (too far from the current quote), Saxo will reject it. Our app will then prompt you to choose a more realistic limit.
This is done because of market turbulence or surprising news: the opening price can sometimes be very different from the previous closing price.
When the Market is CLOSED: Saxo does not apply the "TooFarFromMarket" error. Why? Because without an open market, they don't know what the next opening price will be. That next price might be far from the previous closing price, so they allow the order to be registered
If you successfully place a limit order with an unrealistic price when the market is closed, it is treated as a "cold order."
Cold Order: Saxo accepts the order and holds it "sleeping" on their books. They will not route it to the exchange immediately. It will only be routed and become "active" if the market price moves close enough to your chosen limit price, giving it a realistic chance of being executed.
Hot Order: A limit order with a realistic price (e.g., close to the current quote) is considered a "hot order." This order is immediately routed to the market by the broker because it has a high chance of being executed soon.
Exemple: the last quote for Tesla was $922.50.
Order Type | Limit Price | When Market is OPEN | When Market is CLOSED | Order Status |
Unrealistic Buy | $100.00 | Refused ("LimitTooFarFromMarket") | Accepted | Cold Order (Held by Saxo, not sent to market) |
Unrealistic Sell | $2,000.00 | Refused ("LimitTooFarFromMarket") | Accepted | Cold Order (Held by Saxo, not sent to market) |
Realistic | $900.00 or $950.00 | Accepted | Accepted | Hot Order (Immediately routed to market) |
Conclusion:
You were able to place a limit order with an unrealistic limit only because you did so outside of trading hours. Had you tried to place the same order when the market was open, it would have been rejected. Even though Saxo accepted it while the market was closed, your unrealistic order is currently sitting unexecuted as a "cold order" and has not yet reached the market.