Customerorders Flashcards
Limit orders
guarantee transactions will occur at a specific price or better but do not guarantee execution
Buy Limit Orders
Execute when the price falls to or below the limit price
prevents buying a stock at a price higher than you want
Sell limit orders
Execute when the price rises to or above the limit price
prevents selling a stock at a price lower than you want
Stop Orders (aka stop loss orders)
Do not guarantee price or execution
Trigger (elect) first, then execute
Become market orders after trigger
protects long positions from losses
protects short positions from unlimited lossess
Sell stop orders
Trigger when the price falls to or below the stop price
protects long position by selling if price drops below certain point
Buy stop orders
Trigger when the price rises to or above the stop price
protects short position by buying back stock if the prices rises too much
Stop limit orders
ensures price control
protects long positions from losses
protects short positions from unlimited lossess
Sell stop limit orders
Sell if price drops to a level but only down to a minimum price
once the stop price is hit, it turns into a limit order
ensures you don’t sell too low
Buy stop limit orders
to protect a short position but enurse you don’t buy too high
Long (own the stock)
Worried about: price falling
BEST ORDERS: Sell stop order or stop-limit
Short (borrowed & sold stock)
Worried about: Price Rising
BEST ORDERS: Buy stop order or Stop-limit
