Order Types

Order types are ways you can place buy and sell order if certain conditions exist. It is a good idea to use a Paper Account to practice with your broker before using real money to get comfortable using advanced Order Types.

MARKET

Order used to guarantee an execution, but NOT guarantee a price or time of execution. You only need the stock and the amount of shares.The risk of market orders is that you have no control over what the execution price is. Pay attention to the spread between the bid and the ask. The more volume and lower the spread, usually will have a better execution price.

LIMIT

Default order type for all stock orders are Limit Orders. The limit price for buy orders is placed Below the current market price. The limit price for sell orders is placed above the current market price. Limit orders will be filled at the limit price or better, but are not guaranteed a fill. You need the Stock, The amount of Shares, and the Price you want or better.

STOP

Orders used to open or close a position by Buying if the market Rises or Selling if the market Falls. This is also known as “Stop Loss“. The stop price for buy orders is placed above the current market price. The stop price for sell orders is placed below the current market price. A stop order turns into a market order when the stop is triggered, so the final execution price or time of a stop order is not guaranteed. The same risks of market orders apply to stop orders. In addition to the Standard STOP order which is sent to the exchange, we have created 3 new STOP order types. The “Mark” stop order will be triggered once the Mark or value of the asset reaches or surpasses your stop price. The “Bid” stop order will be triggered once the bid of an asset rises to your stop price or surpasses it (this can be used for a Buy Stop order). The “Ask” stop order will be triggered if the ask price falls to your stop price or surpasses it (this can be used for a Sell Stop order).

STOP LIMIT

Order used to open or close a position by Buying if the market Rises or Selling if the market Falls, but that turns into a limit order when the stop price is triggered. Stop limit orders have a stop price and a limit price. When the stop price is triggered, the limit order is activated. The stop price for buy orders is placed above the current market price. The stop price for sell orders is placed below the current market price. The stop price does not need to be the same as the limit price. Just as with a limit order, the stop limit order will be filled at the limit price or better, but may not be filled at all.

TRAILING STOP

Stop order that continually adjusts the stop price based on changes in the market price. A trailing stop to sell raises the stop price as the market price increases, but does not lower the stop price when the market price decreases. A trailing stop to buy lowers the stop price as the market price decreases, but does not increase the stop price as the market price increases. In both cases, the stop “trails” the market price. When the stop price is reached, the order becomes a market order. The same risk of market orders applies to trailing stops.

TRAILING STOPLIMIT

This order type works the same way as the trailing stop, only instead of a market order being sent to the exchange, a limit order will be sent to the exchange. With this order, you will be able to stipulate the worst price you are willing to accept for a fill. There is no guarantee that you will be filled, though, as the price may gap through your limit price.

MOC (Market on Close)

Order that buys or sells at the market price at the close of trading. You must submit the order by 2:40 pm CT. The same risk of market orders applies to MOC orders.

LOC (Limit on Close)

Order that buys or sells at a limit price at the close of trading. You must submit the order by 2:40 pm CT. The order can be filled at the limit price or better, but is not guaranteed a fill.

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