Stock Market Order Types
Buy / Sell Order Types :
It is Best to know all of your buying and selling options if you are looking to trade penny stocks. There are numerous types of buy/sell orders you can place and they are specially used for different occasions. It is essential that you place the right type of order during the right time or you can end up buying or selling a stock at a price you are not happy with.
What does Execute mean?
“Executed” is just a way of referring to status a transaction. When you buy or sell stock, you’re executing a trade.
Buy / Sell Oder Types:
- Market Order
This is the easiest order type but can be the worst one to use if used at the wrong time.
“Market Order” is used to execute a buy or a sell at current market price. Market Order will guarantee that your order gets executed right away and is ALWAYS the fastest order type to execute. However, There is a risk with this order type, because you are not control what price your order will be executed at.
You should never use a market order if you see a price gap on the “bid and “ask”
Example: If you are looking to buy a stock and the Bid is $2.00 and the Ask is $2.15.
If you place a “Market” Buy Order to buy then you will automatically buy at $2.15 per share because it is the asking price. The smart option would be to place a “Limit” Buy Order at $2.01 per share so that way you get in cheaper without overpaying.
- Limit Order
With the limit order type, you will have the ability to set your price “limit”. Giving you much more control over your sale price. A buy limit order would only execute at or below your limit price and a sell limit order would only execute at or above you limit price.
- Stop On Quote Order
If you think the price of a stock you own might begin to decrease, you can attempt to protect profit or limit losses by placing a stop-on-quote order. With a stop-on-quote order, a trade will only be initiated once the price reaches a specified level, called a stop price.
THIS IS A GREAT ORDER TYPE because it allows you to sell your stock at the right time without having to watch it everyday. By placing a “Stop on Quote Order”, Your broker will actually will monitor the stock for you without charging you any additional fees and get you out at your desired price.
For example if you enter a stock at trading $5.00 per share. Then you can immediately place a “Sell” “Stop on Quote Order” and in the quote entry you can enter $4.95 per share so you only risk 1% of your investment. Your broker will AUTOMATICALLY get you out at roughly $4.95 if the stock price declines to $4.95. The best part is if the stock price goes up you will still be in control of your shares and you can sell whenever you please. You can also increase the price on your “Sell” “Stop on Quote” as the stock price rises to protect your profit on the ride up. This is a great order type to protect yourself.
- Order Durations:
Day Order – An order that will expire when the market closes that day.
GTC Order (Good ‘Til Cancelled) – An order that will last until you cancel the order.
- (AON) All or None – When you place a order you will have an option to choose if you only want your order to get executed if there are enough shares available to meet the requested amount of shares in your order.
So that way you will be guarenteed to buy/sell all your shares at once for the same price.
If you do not check the (AON) box when filling out your order then you may not trade the total amount of shares you requested.
Example: If you are looking to buy 1000 shares and there is only 600 available at the price you want to buy. If you check the (AON) box then your order will not go through unless there is a sell order for 1000 or more to match you FULL order. But if you leave the (AON) box unchecked then you will simply buy any amount of shares available at your set price and your order will remain active until you complete buying the rest of the shares if more shares become available at your set price.
There is More you can learn about Stock Market Order Types. Keep this link in your resources. Click Here to learn more about Stock Market Order Types
Buy / Sell order types
- Chapter I. Stock Market Concept
- Chapter II. How to Buy Stocks
- Chapter III. How to Read Stock Quotes
- Chapter IV. What Makes a Stock go UP or DOWN
- Chapter V. Buy / Sell Order Types
- Chapter VI. How to read Level II Quotes
- Chapter VI. Rules for Daytrading Pennystocks
- Chapter VII. How to Read Stock Charts
Stock market Order types