Timing is the most important factor when trading stocks. A stock order is an essential instrument for investors who want to close deals as soon as possible at the going rate. Still, in addition to convenience and speed, these orders have drawbacks. Let’s look at what stock orders are, how they work, and how traders using trading platforms like Lextroy Management can give traders benefit from it.
A Quick View On Stock Orders
An instruction to purchase or sell stock from a trading platform is known as a stock order. One may notice a range of orders accessible on a trading screen while placing the order. The basic trading unit in a securities market is an order. While trade platforms or automated trading systems like Lextroy Management are still the most common ways for orders to be made, they can also be placed online or over the phone. Order execution is the procedure that follows the placement of an order. There are three basic types of stock orders that a trader should understand very well.
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Lextroy Management’s View On Market Order:
A market order is placed to purchase or sell stock at the best price that is offered. Such orders are typically carried out right away. Nevertheless, there is no assurance as to the price where a market order can be filled. Investors should remember that a market order may not always be executed at the price indicated by the most recent deal. A market order’s execution price frequently differs from the last traded price or “real-time” quote in rapidly moving markets.
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Limit Order:
Investors that use limit orders also known as pending orders, can purchase and sell shares at a specific price at a later time. When using this kind of order, a trade is executed if the price hits the predefined level, and if it doesn’t, the order won’t be filled. A limit order essentially establishes the highest or lowest price one is willing to purchase or sell at. Lextroy Management’s automated function guides traders on when to limit orders.
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Stop-Loss Order:
A stop-loss order is an order made with a broker that instructs investors to either purchase or sell an asset when it reaches a set price. Lextroy Management says the goal of a stop-loss is to limit an investor’s loss on a security holding. Stop-loss orders and stop-limit orders are comparable. However, as their name implies, the price they will execute is limited.
Final Thoughts
Giving a broker instructions to purchase or sell an asset on a trader’s behalf is known as an order. Investors can specify the price at which they buy or sell, the date of the deal, and whether the order will be completed or canceled if specific conditions aren’t met by using the various forms of orders. However, there are more types of stock orders which are easily described on Lextroy Management’s website. To start the trading journey, check out the website, and boom!
