ONLINE STOCK TRADING ORDER ENTRY TO OPEN POSITION
Market Order: This is an order to immediately buy or sell a stock at the current market price. By "current" it means at the inside market (best Bid or Ask) or at whatever price the seller/buyer will be willing to fill your online stock trading order at, and "immediately" can mean up to 7 1/2 minutes at times and 5 points later (from my own experience).
When trading online, you should hardly ever use a market order to buy a stock before or at market open. You are almost guaranteed to get a lousy fill. You may use market orders to buy stocks after the open, depending on the issue and its spread (the difference between the Bid and Ask). However, we recommend you try and avoid placing market orders at all times, unless you feel you have to use one. (Please note that the online stock trading execution system you use or are able to use, your broker, etc., are variables that differ for all investors. Therefore, you must determine how you can enter a position in the best and most profitable manner according to all the variables and tools you have.) We will look at advanced order entry systems later in other sections of this website.
Limit Order: This is an order to buy or sell a stock at a specified price. When using this type of online trading order, you specify a price and the order can be executed only if the market reaches or betters that price. It is a conditional trading order designed to avoid the danger of adverse unexpected price changes. This is the type of order that should be used most often to enter positions. It is great to use on stocks with bigger than a 0.03 spread as well as extra volatile stocks.
All of the content published on this website is to be used for informational purposes only and without warranty of any kind. The materials and information in this website are not, and should not be construed as an offer to buy or sell any of the securities named in these materials. Trading of securities may not be suitable for all users of this information.
Market Order: This is an order to immediately buy or sell a stock at the current market price. By "current" it means at the inside market (best Bid or Ask) or at whatever price the seller/buyer will be willing to fill your online stock trading order at, and "immediately" can mean up to 7 1/2 minutes at times and 5 points later (from my own experience).
When trading online, you should hardly ever use a market order to buy a stock before or at market open. You are almost guaranteed to get a lousy fill. You may use market orders to buy stocks after the open, depending on the issue and its spread (the difference between the Bid and Ask). However, we recommend you try and avoid placing market orders at all times, unless you feel you have to use one. (Please note that the online stock trading execution system you use or are able to use, your broker, etc., are variables that differ for all investors. Therefore, you must determine how you can enter a position in the best and most profitable manner according to all the variables and tools you have.) We will look at advanced order entry systems later in other sections of this website.
Limit Order: This is an order to buy or sell a stock at a specified price. When using this type of online trading order, you specify a price and the order can be executed only if the market reaches or betters that price. It is a conditional trading order designed to avoid the danger of adverse unexpected price changes. This is the type of order that should be used most often to enter positions. It is great to use on stocks with bigger than a 0.03 spread as well as extra volatile stocks.
All of the content published on this website is to be used for informational purposes only and without warranty of any kind. The materials and information in this website are not, and should not be construed as an offer to buy or sell any of the securities named in these materials. Trading of securities may not be suitable for all users of this information.
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