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Market Order

The document discusses different types of stock orders including market orders, limit orders, stop loss orders, day orders, open orders, fill-or-kill orders, and all-or-nothing orders. Market orders are executed immediately at the best available price. Limit orders are only executed at the limit price or better. Stop loss orders become market orders if the stock reaches a certain price. Day orders expire at the end of the trading day if not filled. Open orders remain active until their conditions are met or cancelled. Fill-or-kill orders are cancelled if not fully filled immediately. All-or-nothing orders are cancelled if the full amount can't be obtained at the specified price.

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Nikoleta Trudov
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40 views

Market Order

The document discusses different types of stock orders including market orders, limit orders, stop loss orders, day orders, open orders, fill-or-kill orders, and all-or-nothing orders. Market orders are executed immediately at the best available price. Limit orders are only executed at the limit price or better. Stop loss orders become market orders if the stock reaches a certain price. Day orders expire at the end of the trading day if not filled. Open orders remain active until their conditions are met or cancelled. Fill-or-kill orders are cancelled if not fully filled immediately. All-or-nothing orders are cancelled if the full amount can't be obtained at the specified price.

Uploaded by

Nikoleta Trudov
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Market order

Let's assume that Ion wants to purchase 1,500 shares of XYZ stock at $10, and Andrei wants
to sell 1,500 shares at $10.25.
If Ion was to place an order to buy 1,500 shares, he would receive 1,500 shares at the asking
price of $10.25. If he placed a market order for 2,000 shares, Ion would get 1,500 shares at
$10.25 and 500 shares at the next best offer price, which might be higher than $10.25.
Limit order
1. Using the above example, Ion places a limit order to sell 2,000 shares at $10. Upon
placing such an order, he would immediately sell 1,000 shares at the existing offer of
$10. Then, he might have to wait until another buyer comes along and bids $10 or
better to fill the balance of the order. Again, the balance of the stock will not be sold
unless the shares trade at $10 or above. If the stock stays below $10 a share, the seller
might never be able to unload the stock.
2. If you want to buy stock ABC, which is trading at $12, you can set a limit order for $10.
This guarantees that you will pay no more than $10 to buy this stock. Once the stock
reaches $10 or less, you will automatically buy a predetermined amount of shares.
*On the other hand, if you own stock ABC and it is trading at $12, you could place a
limit order to sell it at $15. This guarantees that the stock will be sold at $15 or more.
Stop loss order
1. Lets suppose an investor wants to sell 1,000 shares of XYZ stock if it trades down to
$9. In this case, the investor might place a stop order at $9 so that when it does trade
to that level, the order becomes effective as a market order. To be clear, it does not
guarantee that the order will be executed at $9. However, it does guarantee that the
stock will be sold. If sellers are abundant, the price at which the order is executed might
be much lower than $9.
2. If you own stock ABC, which currently trades at $20, and you place a stop order to sell
it at $15, your order will only be filled once stock ABC drops below $15. Also known as a
"stop-loss order", this allows you to limit your losses.
*However, this type of order can also be used to guarantee profits. For example,
assume that you bought stock XYZ at $10 per share and now the stock is trading at $20
per share. Placing a stop order at $15 will guarantee profits of approximately $5 per
share, depending on how quickly the market order can be filled.
No price order
Hit order
Let's assume that Ion wants to purchase 1,500 shares of XYZ stock at $10, Mihai wants to
purchase 1500 shares at 15$, and Andrei wants to sell 1,500 shares.
If Andrei was to place an order to sell his shares, he would sell 1,500 shares at the asking
price of $15.
Match order
Day order
Let's assume that John Doe wants to buy Company XYZ shares, but he's going to Bermuda for
two weeks tomorrow and doesn't want to deal with his broker while he's on vacation. So, John
puts in a day order to buy 1,000 shares of Company XYZ at $5. If the trade can't be executed
at $5 a share by the end of the day, the order expires.
There is a chance that the trade won't happen, because Company XYZ shares opened at
$5.25 and may not get down to $5 by the end of the day.
Open order
An order may remain open when an investor places conditions on their transaction, such as a
price minimum. If the condition is not met (e.g. the stock has not yet reached the minimum
amount requested by the investor), the order remains "open."

Fill and kill order


At 10:00 AM Tuesday, you want to place an order to 1000 shares of XYZ stock. You want the
entire order to fill right away, otherwise you don't want it. Create the buy order, select an
order type from the Type field (in this example, we've chosen a limit order), and select FOK as
the time in force. If the entire order does not fill immediately once it is accepted by the
market, the entire order is canceled.
All or none order
For example, if you wanted to purchase 1,000 shares of Company XYZ at $5 per share "all or
nothing," the broker would have to find all 1,000 shares at $5 in order to complete the
transaction. If the broker could provide 900 shares at $5 and 100 at $5.05, then the order
would be cancelled at the end of the day.

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