Five common orders in US stocks

1. Market Order

The market price order is executed at the current quotation of the market, and there is no need to set the price by yourself, which can make the order be executed quickly. A market order is a pending order that only depends on time, and the transaction price cannot be guaranteed. When the exchange receives the market price order, it will be executed immediately, no matter what the current market price is, the market price order will be executed immediately when the investor confirms the order.

Advantages: fast transaction speed and immediate execution.

Cons: Prices are not guaranteed. Market orders cannot be placed before and after the market. Market orders can be placed starting at 8:10 EST, and the transaction will be executed at the opening price. Because the opening price fluctuates greatly, the price cannot be guaranteed, so you must operate with caution.

2. Limit Order

Limit orders need to set a transaction price, and will only be executed when the specified price is reached or a better price is available. A buy order is to buy at the market price below the limit price, and a sell order is to sell at the market price above the limit price. When the market price reaches the price you set, the limit order will be executed at the set price or a better price. If the best available price at that time does not reach the set level, the order will wait for execution. The limit order is A pending order that only depends on the price cannot guarantee the transaction time, or even whether it can be executed. The effective limit order of the day will be automatically canceled after the market closes, and the order can also be cancelled.

Advantage: Make a deal at a specified price or a better price.

Disadvantage: If the price does not meet the requirements, it will not be sold.

3. Stop loss order (Stop)

A stop loss order refers to setting a stop loss price in an order. A specified stop loss price needs to be entered. 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.

Advantages: A way to place orders to help users protect profits and limit losses for their stock and option positions.

Explanation and Notes: There is no guarantee that 100% of the order will be successfully placed, nor will the successful transaction be guaranteed. Insufficient purchasing power and insufficient positions will lead to the failure of triggering orders. Triggered does not mean that the order is completed. The stop loss order is just that the system will automatically submit a limit order for the investor after the system detects that the trigger price is reached; the order after the trigger is the same as the ordinary order. If there is no match, it will be automatically canceled after the close of the day; After the loss order is triggered to generate a real order, there will be no actual relationship between the real order and the stop loss order, and deleting the stop loss order will not have any impact on the real order.

4. Stop Limit Order

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

Advantage: The stop loss limit order will be listed in the form of a limit order, which can avoid the problem of too large deviation of the transaction price. The difference between a stop loss order and a stop limit order: a stop loss order will ensure that the order can be completed as soon as possible in the form of a market order, but it does not guarantee the transaction price. The stop limit order will be placed in the form of a limit order 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.

Explanation and precautions: If it is a stop loss order, it will definitely be able to be traded, even though it may be sold at a very low price; for a limit stop loss order, when the price quickly drops below the limit price, the order will be useless, and the loss will be keep expanding.

Operation tips: When buying, the limit price should be greater than the stop loss price. When selling, the limit price should be less than the stop price.

5. Trailing stop order (Stop-Trailing)

A trailing stop 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 price difference can be expressed by the amount or the percentage of the market price.

Advantage: The stop price in the trailing stop 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.

Explanation and precautions: 100% transaction may not be guaranteed; triggering does not mean that the order is completed, and the trailing stop loss is just that the system will automatically submit a market price/limit order for investors after the system detects that the trigger price is reached; triggering orders and ordinary orders Similarly, if there has been no matching, it will be automatically canceled after the market closes;

After the trailing stop order is triggered to generate a real order, there will be no actual relationship between the real order and the trailing stop order, and deleting the trailing stop order will not have any impact on the real order; using this order can limit the maximum possible loss, Without any restrictions on the maximum value of income, maximize profits while being insured.

Operation tips: When “selling” a trailing stop order, when the market price rises, the stop loss price will also rise; but when the market price falls, the stop loss price will remain unchanged. When the stock price hits the stop price, a market order is sent to the exchange. For trailing stop “buy” orders, when the market price falls, the stop loss price will decrease; but when the market price rises, the stop loss price will remain unchanged.