BASICS OF TRADING A STOCK: Different types of Stock Orders
Stock Trading Involves The Process Of Putting The Orders For Buying Or Selling The Stocks. Many Investors Are Not Aware You Can Place Different Types Of Stock Orders.
Here, You Can Also Set Different Sorts Of Limit In Your Order. You Will Learn About Various Types Of Stock Trading Orders-
Type Of Stock Orders-
1. Market Order
2. Limit Order
3. Stop Order
4. Buy Stop Order
Let’s Start With The Basics,
In the Stock Market Placing A Trade Order Seems Insightful A “Buy” Button To Start The Trade And A “Sell” Button To Close The Trade. This Is The Difference Between The Expected Price And The Price At Which The Order Is Filled. So, When You Are Trading Stocks That Are Highly Unpredictable Or When You Are Trading In A Fast Moving Market, Slippage Can Be The Difference Market Between The Winning And The Loosing Positions.
It’ S Good To Understand Trade Order Beyond The Traditional Format Of “Buy” And “Sell” Is Very Important For The Investors.
With The Explosion Of The Digital Platforms. Most Of The Investors Are Opting To Buy And Sell Stocks In Online Platform Instead Of Paying On Stock Advisory, Which Charges More To Execute The Trades. Once You Understand The Concept Of Different Types Of Orders, You Can Only Execute them By Buying Or Selling The Stocks Which Will Save you time As Well As Your Money.
Types Of Stock Trade Orders-
1. Market Order
Market Order Is One Of The Basic Type Of Trade. A Market Order Is a trade Order To Purchase Or Sell A Security Immediately. Here The Market Order Is That An Individual Cannot Control The Amount Paid For The Stock Purchase / Buy Or Sale. The Market sets the Price.
Market Orders Do Not Guarantee A Price, But They Do Guarantee The Order’s Immediate Execution.
If Investors Who Want To Buy Or Sell A Stock Without Delay Can Go With the Market Order Type.
2. Limit Order
A Limit Order Is a trade Order To Buy Or Sell A Security At an Exact Price Or Better.
Limit Orders Also Referred To As Pending Orders, Allow The Investors To Buy And Sell Securities At A Secured Price In The Future.
Here, The Buy Limit Order Can Only Be Executed At A Specific Limit Price Or Lower And A Sell Limit Order Sets The Maximum Or Minimum Price At Which The Investors Are Willing To Buy Or Sell.
3. Stop Order
In Other Terms, Stop Orders Are Known To As Stop-Loss Orders.
Here The Trade Order Is Designed To A Limit, An Investors Order Is Protected On Loss On A Position.
In Stop Order Where To Buy Or Sell A Stock Once The Price Of The Stock Reaches A Specified Price Is Recognized As The Stop Price. So, When The Stop Price Is Reached A Stop Order Becomes A Market Order.
4. Buy Stop Order
Here, a Buy Stop Order Is Entered At A Specific Stop Price Above The Current Market Price.
The Investors Usually Use A Buy Stop Order To Limit The Loss And it can also Be Used To Protect A Profit On The Stock They Have Sold Short.
Here, Sell Stop Order Enters At A Stop Price Below The Price Of The Current Market.
I Hope This Blog Helped You To Learn The Basic Types Of Stock Trade.
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Disclaimer
The information I’ve included here is for general informational purposes only and should not be construed as financial advice. Investing in the stock market involves inherent risks, and profits or protection against losses are not guaranteed. Before making any investment decisions, conducting thorough research and seeking advice from a qualified financial advisor or professional is essential.