H ere are the main orders you can place with your brokerage to buy or sell stocks. Some can be combined.
Market order: This is for immediate execution at the best price available when the order reaches the marketplace. It's the most common type of order and is nearly always filled, since no price is specified.
It can be risky if the stock unexpectedly moves sharply -- which isn't common.
Limit order: This is an order to buy or sell only at a specified price (the "limit'') or better. It's used by investors with a maximum or minimum price at which they're willing to trade. It can be handy if you like a company but think its stock is a little too rich, as you can place a limit order to buy it if it falls to a lower price.
Fill-or-Kill: If this order cannot be filled immediately, it's automatically canceled.
Day Order: If this order hasn't been filled by the end of the trading day, it terminates automatically.
GTC (Good Till Canceled): This order remains in effect until executed by the broker or canceled by you.
Many brokerages cancel GTC orders after a month or two, though.
Stop Order: This becomes a market order when a specified price is reached or passed. Buy stops are entered above the current market price; sell stops are entered below it.
For example, you might place a stop order to have your shares of a stock automatically sold if it falls below $25 per share. A stop order guarantees execution but not price.
Stop Limit Order: This becomes a limit order when a specified price is reached or passed. If you place a "sell 100 XYZ $55 stop limit'' order, if XYZ drops to $55 per share or below, the order becomes a limit order to sell 100 shares at no less than $55. This order doesn't guarantee execution.
Learn more about brokerages at broker.fool.com.
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|Publication:||Telegram & Gazette (Worcester, MA)|
|Date:||Feb 1, 2015|
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