Types of Orders Flashcards
If the market trades at or through the preset stop price, the order will be activated. Once activated, it becomes a limit order and may be executed only at a specified price or better.
Stop-Limit Order
Entered by customers who are trying to prevent a large loss or protect a profit on an existing stock position
Stop (Loss) Orders
Order that may be executed only at the specified price or better
Limit Order
May only be executed at the limit price or lower
Buy Limit Order
May only be executed at the limit price or higher
Sell Limit Order
Anticipate that the security will fall in value (i.e., bearish), but they will lose money if the position rises
Short sellers
Order that is executed at the best available price
Market Order
Order often used for stocks that have active (liquid) markets in which the spread is narrow
Market Order
Order is placed below the current market price of the security and is used to limit a loss or protect a profit on a long stock position
Sell Stop Order
A combination of both stop and limit orders that presents a risk/reward trade-off
Stop-Limit Order
Order where client doesn’t specify price
Market Order
Customers want to buy/sell securities at a specific price
Limit Order
Contingent order, which means that it won’t receive execution unless the market rises or falls to a certain price
Stop Order
If this order is activated, it becomes a market order and the investor is guaranteed that the order will be executed, however, not guaranteed as to the price of execution
Stop Order
Order is placed above the current market price of the security and is used to limit a loss or protect a profit on a short sale
Buy Stop Order
