Chaptere 14: The Basics of Trading a Stock: Know Your Orders Flashcards
(35 cards)
A _______________ is the most basic type of trade. It is an order to buy or sell immediately at the current price.
market order
Typically, if you are going to buy a stock, then you will pay a price at or near the posted ____.
ask
If you are going to sell a stock, you will receive a price at or near the posted ______.
bid
are popular among individual investors who want to buy or sell a stock without delay.
Market orders
do not guarantee a price, but they do guarantee the order’s immediate execution.
Market orders
sometimes referred to as a pending order, allows investors to buy and sell securities at a certain price in the future.
limit order
In effect, a __________ sets the maximum or minimum price at which you are willing to buy or sell.
limit order
This type of order is used to execute a trade if the price reaches the pre-defined level; the order will not be filled if the price does not reach this level.
limit order
four types of limit orders
- Buy Limit
- Sell Limit
- Buy Stop
- Sell stop
an order to purchase a security at or below a specified price.
Buy Limit
an order to sell a security at or above a specified price.
Sell Limit
an order to buy a security at a price above the current market bid.
Buy Stop
an order to sell a security at a price below the current market ask.
Sell Stop
to buy becomes active only after a specified price level has been reached
stop order (known as the stop level).
is also referred to as a stopped market, on-stop buy, or on-stop sell, this is one of the most useful orders.
Stop-Loss Order
This order is different because, unlike the limit and market orders, which are active as soon as they are entered, this order remains dormant until a certain price is passed, at which time it is activated as a market order.
Stop-Loss Order
These are similar to stop-loss orders
Stop-Limit Order
There are two prices specified in a stop-limit order: .
- stop price
- the limit price
which will convert the order to a sell order
stop price
Instead of the order becoming a market order to sell, the sell order becomes a limit order that will only execute at the limit price or better.
Stop-Limit Order
This type of order is especially important for those who buy penny stocks.
all-or-none order
This can mitigate a potential problem with stop-loss orders, which can be triggered during a flash crash when prices plummet but subsequently recover.
Stop-Limit Order
ensures that you get either the entire quantity of stock you requested or none at all.
all-or-none order
mandates that whatever amount of an order that can be executed in the market (or at a limit) in a very short time span, often just a few seconds or less, be filled and then the rest of the order canceled.
IOC order
