One big clip or two small ones?

Question

The offer side of a stock looks like this:

Side	Price	Size
Ask	$30.00$	$200$
Ask	$30.05$	$200$
Ask	$30.10$	$200$

You need to buy $400$ shares.

Compare buying all $400$ at once with splitting into two clips of $200$ , and state the condition under which splitting actually helps.

Accepted Answer

Buy 400 at once. The market order sweeps the top two levels: - 200 shares at 30.00 = \6{,}000 - 200 shares at 30.05 = \6{,}010 Total \12{,}010, average \30.025. You paid 2.5 cents of slippage above the best offer for the size. Split into two clips of 200. Buy 200 now at 30.00 for \6{,}000. Then wait. If the pressure was temporary, other sellers refill the top level and the best offer returns to 30.00 with fresh size. Your second 200-share clip then also fills at 30.00 for \6{,}000. Total \12{,}000, average \30.00, a saving of 2.5 cents per share, about \10 on 400 shares. The condition. Splitt…

One big clip or two small ones?

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