Basically, an order is a command from an investor to be executed by a broker or a brokerage company. This order is whether to buy or sell. There are various types of orders which allow traders to set a premise in relation to price and time they want their orders to be executed. Different order instructions have direct effect to an investor’s profit and loss.
Orders are accepted from an individual or from organizational investors. Commonly, investors opt in placing orders through brokers and dealers which require them to trade with one of the many types they are offering.
Enumerated below are basic order types:
MARKET ORDER– This commands the broker to accomplish the order at the next price.
LIMIT BUY ORDER-This requires the broker to purchase a security at or just below a certain price.
LIMIT SELL ORDER– This requires the broker to sell asset at the value just above the current price
SELL STOP ORDER-This asks the broker to sell once the asset lands on a specified value just beneath the current price.
BUY STOP ORDER– This asks the broker to purchase an asset once it meets a specific value just under the current price.
DAY ORDER- an order which requires broker to execute the order at the same day it was placed.
GOOD TILL CANCELLED- A type of order that is effective until they are executed or cancelled.
FILL OR KILL ORDER- Demands an urgent and complete execution and if not, it gets cancelled.
Success of trading is swayed by what kind of order is used as it greatly impacts whether a trade will profit or will meet mounting losses.