Bro­ker­age Or­ders, Ex­plained

The Saratogian (Saratoga, NY) - - BUSINESS -

If you’re go­ing to buy and sell stocks through a bro­ker­age, you’ll need to un­der­stand the kinds of or­ders you can place. Be­low are the main ones:

• Mar­ket or­der: Place a mar­ket or­der when you want im­me­di­ate ex­e­cu­tion of your trade. The most com­mon type of or­der, it’s al­most al­ways filled, since no price is spec­i­fied. If the stock soars or plunges un­ex­pect­edly, you might pay or re­ceive an un­ex­pected price, but that’s un­com­mon.

• Limit or­der: This is an or­der to buy or sell only at (or bet­ter than) a spec­i­fied price (the “limit”). Use it if you have a max­i­mum or min­i­mum price at which you’re will­ing to trade. If you want to in­vest in a com­pany but think its stock is too ex­pen­sive, you can in­struct your bro­ker­age to buy only if it falls to or be­low your limit.

• Day or­der: Day or­ders ex­pire at the end of the day, if they haven’t been filled yet.

• GTC (good till can­celed) or­der: A GTC or­der stays in place un­til it’s ex­e­cuted or you can­cel it — though your bro­ker­age might can­cel it af­ter a few months.

• Stop or­der: A stop or­der be­comes a mar­ket or­der once a stock reaches (or passes) a price that you choose. For ex­am­ple, you might place a stop or­der to sell cer­tain shares if they fall be­low $25. The or­der takes place at the next avail­able trans­ac­tion price: If the shares close one day at $27 but then open the next morn­ing at $22 due to bad news, your sale would hap­pen at $22.

• Stop limit or­der: With a stop limit or­der, you spec­ify a min­i­mum sale price or max­i­mum pur­chase price. So if you place a stop limit or­der to sell a stock at $60, and the stock falls to $60, the or­der be­comes a limit or­der to sell your shares for no less than $60 apiece. If your price isn’t ac­cept­able to the mar­ket, the trans­ac­tion may not hap­pen.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.