Different types of order.

  • Market orders
    Buy or sell a stock immediately at the best available current price.
  • Limit orders
    Buy or sell a stock at a specified or better price, which means a buy limit order will be executed at or lower than specified price and a sell limit order will be executed at or higher than specified price. If these conditions are not satisfied, your order will not be executed.
  • Stop orders
    Stop order can also be called stop-loss order. The order becomes market order once it reaches the stop price.
    A buy stop order may be used to buy back shorted trades. The stop price for buy stop order must be at or above market price (for example, scottrade requires above market price by 0.1). For example, if you short IBM on $190.00, now market price is $194.00, you may place a buy stop order at $195.00, so once the market price reaches $195.00, your order will become market order and be executed.
    A sell stop order may be used to sell longed trades. The stop price for sell stop order must be at or below market price (for example, scottrade requires above market price by 0.1). For example, if you long IBM on $190.00 now market price is $185.00, you may place a sell stop order at $184.00, so once the market price reaches $184.00, your order will become market order and be executed.
    If the stop price is never reached, your order will not be executed.
  • Stop-limit orders
    Buy or sell at a specified price or better after a specified stop price has been reached. The difference from stop order is that stop-limit order will become a limit order after stop price is reached instead of becoming a market order. It is useful if the stock price moves very fast. For example, market price of IBM is $195.00. You have been placed a sell stop order with stop price at $194.00 and a sell stop-limit order with stop price at $194.00 and limit price at $193.99. If the market price of IBM at 10:00 am drops from $195.00 to $194.00. Both sell stop order and sell stop-limit order are triggered. Imaging next second 10:01 am, the market price of IBM becomes $193.00. Now the sell stop order will be executed at $193.00 but the sell stop-limit order will not be executed because $193.00 is below your limit price $193.99. If the market price of IBM bounced back to $194.00 later, then your sell stop-limit order will be executed at $193.99 which is your limit price.
  • Trailing stop orders
    Trailing stop orders are derived from stop orders except you specify a trailing amount(percentage or points($)) instead of stop price, which can be used to specify a limit on the maximum possible loss, without setting a limit on the maximum possible gain. The stop price is determined by
    subtracting(sell) or adding(buy) trailing amount based on market price. Stop price will only be adjusted if the gap between stop price and market price is larger than trailing amount.
    For example, market price of IBM is $200.00 and you place a sell trailing stop order at 10% or $10, then your stop price will be $180.00 or $190.00. If the market price raise to $210.00, your stop price will be adjusted to $189.00 or $210.00. If the market price falls, the stop price won’t be adjusted.
    Let’s see another example with buy trailing stop order. Still assuming market price of IBM is $200.00 and you place a buy trailing stop order at 10% or $10, then your stop price will be $220.00 or $210.00. If the market price falls to $190.00, your stop price will be adjusted to $209.00 or $200.00. If the market price raises, the stop price won’t be adjusted.
  • Day orders
    Terminates automatically at the end of the trading day if it has not been filled by that time.
  • Good-till-cancelled orders
    Buy or sell at a limit price remains in force until it is either executed by broker or cancelled by investor.
  • Fill-or-kill orders
    The order be cancelled automatically if it is not executed immediately.
  • All-or-none orders
    Fill the entire amount of order or none of it at all. For example, you place a all-or-none order to buy 1 million shares of IBM. Your order will be executed only if there is 1 million shares for selling.