Five common orders for U.S. stocks

Order types in the US stock market are divided into five types, which are high price order, limit order, stop loss order, limit stop loss order and tracking stop loss order. Can meet the needs of different situations, the following details the five types of orders:

1.Market Order

The market order is traded at the current price of the market, there is no need to set the price yourself, which can make the order quickly. Market orders are pending orders that depend only on time and cannot guarantee a trading price. The market order is executed as soon as the exchange receives it, regardless of the current market price. The market order is executed as soon as the investor confirms the order.

Advantages: Fast transaction speed, immediate execution.

Cons: Price is not guaranteed. Before and after the market time can not be under the market order, 8:10 Eastern time can be under the market order, will be traded at the opening price, because there is a large fluctuation in the opening price, so the price is more not guaranteed, to be cautious.

2.Limit Order

A limit order requires a transaction price to be set and is executed only if the specified price is reached or a better price is available. An order is bought at the market price below the limit, and a sell order is sold at the market price above the limit. When the market reaches the price you set, a limit order will be executed at the set price or better. If the best available price at that time does not reach the set level, the order will wait to be executed. A limit order is a pending order that depends only on the price, with no guarantee of trading time or even execution.

Limit orders valid for the day will be automatically cancelled after the market closes and can also be withdrawn.

Advantage: Trade at a specified price or better.

Disadvantages: If the price does not meet the requirements, there will be no transaction.

3.Stop Order

A stop loss order is to set a stop loss price in the order, you need to enter a specified stop loss price, once the stock price reaches the set stop loss price, it will be traded as a market order. The difference between a stop loss order and a limit order is to sell low and buy high.

Advantage: A way to help users protect profits and limit losses on stock and option holdings.

Instructions and Precautions:

There is no guarantee that 100% of the order will be successful, nor that the transaction will be successful. Insufficient purchasing power and insufficient position will lead to the failure of triggering the order. It does not mean that the order has been triggered. The stop loss order only automatically helps investors submit a limit order after the system detects that the trigger price has been reached. The triggered order is the same as the ordinary order, if there has been no matching, it will be automatically cancelled after the close of the day;

After a stop loss order is triggered to generate a real order, the real order and the stop loss order will not have any actual correlation, and deleting the stop loss order will not have any effect on the real order.

4.Stop Limit Order

A limit stop order requires the user to enter a specified stop loss price and a specified limit price. Once the stock price reaches the set stop loss price, a limit order will be placed. The difference between a stop loss order and a limit stop loss order: The order is triggered when the stock price reaches the stop loss price.

Advantage: The stop-loss limit order will be hung in the form of a limit order to avoid the problem that the transaction price deviation is too large. The difference between a stop loss order and a limit stop loss order: A stop loss order guarantees that the order can be completed as quickly as possible in the way of a market order, but does not guarantee the price of the transaction. Stop-loss limit orders will be placed in the form of limit orders to ensure that the transaction price is equal to or better than the limit price set by the user, but there is no guarantee that the transaction will be completed.

Note: If it is a stop loss order, you must be able to deal, although it may be sold very low; For a limit stop loss order, when the price quickly falls below the limit, the order is useless and the loss will continue to grow.

Operation tip: When buying, the limit price is greater than the stop price. When selling, the limit price is less than the stop price.

5.Stop-Trailing orders

A tracking stop loss order does not limit the stop loss price itself, but can set the difference between the stop loss price and the market price. The setting of the spread can be expressed as the amount or as a percentage of the market price.

Advantage: The stop price on a tracking stop loss order is automatically adjusted. When the market price changes in a favorable direction, the stop loss price will change with the change of the market price at the interval of the difference (amount or percentage) set by the user.

Instructions and Precautions:

A 100% transaction is not guaranteed; It does not mean that the order has been triggered. The tracking stop loss only automatically helps investors submit market/limit orders after the system detects that the trigger price has been reached. The triggered order is the same as the ordinary order, if there has been no matching, it will be automatically cancelled after the close of the day;

After a tracking stop loss order is triggered to generate a real order, there will be no actual correlation between the real order and the tracking stop loss order, and deleting the tracking stop loss order will not have any impact on the real order.

With this order, the maximum possible loss can be limited without any limit to the maximum profit, and the profit can be maximized while being insured.

Operation tip: When "selling" a tracking stop loss order, when the market price rises, the stop loss price will also rise; But when the market price goes down, the stop loss price stays the same. When the stock price hits the stop loss price, a market order is sent to the exchange. For a tracking stop "buy" order, the stop loss price will decrease when the market price decreases; But when the market price rises, the stop loss price stays the same.