The Stock Market

Understanding Four Stock Order Types

There are mainly Four Different Stock Order Types in the Stock Market

Market order

This is one of the stock order types to buy or sell shares at the market price.

 

Limit order

  1. An order that limits the purchase price. For example, if an order is placed to buy 1,000 shares of Microsoft with a $100 limit, then the broker will buy the shares only if the price is below $100 per share.
  2. An order that limits the selling price. For example, if an order is placed to sell 1,000 shares of Microsoft with a $200 limit, then the broker will sell the shares only if the price is above $200 per share.

 

Day order

An order is limited to one trading day. If the transaction is not completed by the end of the day, the order is canceled.


Good until canceled (GTC) order

This order remains valid until it is filled or canceled. It is important to keep this type of order constantly in mind since it can be suddenly completed a year or more after being placed.

Understanding Four Stock Order Types559Understanding Four Stock Order Types