Types Of Order
- 1. PRESENTED BY: TOOBA SHAFIQUE TOPIC: TYPE OF ORDER
- 2. ORDER Instruction to a broker/dealer to buy, sell, deliver, or receive securities or commodities that commits the issuer of the "order" to the terms specified.
- 3. TYPES OF ORDERS • MARKET ORDER • LIMIT ORDER • STOP ORDER • CONDITIONAL ORDER • GOOD TILL CANCLE ORDER
- 4. MARKET ORDER • A market order is an order to buy or sell a security immediately. This type of order guarantees that the order will be executed, but does not guarantee the execution price. A market order generally will execute at or near the current bid (for a sell order) or ask (for a buy order) price. However, it is important for investors to remember that the last-traded price is not necessarily the price at which a market order will be executed.
- 5. LIMIT ORDER • A limit order is an order to buy or sell a security at a specific price or better. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. Example: An investor wants to purchase shares of ABC stock for no more than $10. The investor could submit a limit order for this amount and this order will only execute if the price of ABC stock is $10 or lower.
- 6. STOP ORDER A stop order (also called a stop-loss order or stop market order) is a trade order whereby the investor instructs the broker to automatically sell the stock if it drops to a certain price. • For example, let's assume that you own 100 shares of Company XYZ stock, for which you have paid $10 per share. You are expecting the stock to hit $12 sometime in the next month, but you do not want to take a huge loss if the market turns the other way.
- 7. Conditional orders • Are advanced trade orders that are automatically submitted or canceled if specified criteria are met. Conditional orders must be placed before the trade is entered, and are considered the most basic form of trade automation. Two common conditional orders are the order cancels order (OCO) and the order sends order (OSO)
- 8. GOOD TILL CANCLE ORDER • An open order is an order to buy or sell a security that remains in effect until it is either canceled by the customer