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Primary peg

A pegged order that tracks the near side of the market: the bid for a buy, the ask for a sell, usually with a small offset.

Primary pegging keeps you passive. As the near-side quote moves, the venue re-prices your order to stay joined to it, so you continue to add liquidity and earn any maker rebate instead of paying the taker fee.

The hazard is that re-pricing usually resets your queue-position at the new price level, so a jumpy quote can leave you perpetually at the back of the line.

Example: you rest a primary-peg buy of 2,000 shares with zero offset. Bid 15.20, you are at 15.20 behind 40,000 shares. The bid ticks to 15.21 and you re-price, now behind whatever size is already there. Ten such ticks later you have still not traded, while a fixed limit at 15.20 might have filled on the pullback.

Related: pegged-order, midpoint-peg

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