When you place a market order, you give up the chance to get a better price, but you’re guaranteed to get the stock at whatever price it’s selling for when your order goes through.
There are many types of market orders:
Limit order
A limit order is an instruction to buy or sell a security at a specified price. A buy limit order can only be done at the limit price, and a sell limit order can only be done at the limit price or higher.
Stop-loss order
A stop-loss order is placed with a broker to buy or sell when the stock reaches a specific price. It’s designed to limit an investor’s loss in security. A stop-loss order becomes a market order when the stock reaches the stop price.
Stop limit order
A stop-limit order is placed with a broker to buy or sell when the stock reaches a specific price. It is designed to limit an investor’s loss in security. When stocks reach the stop price, a stop-limit order becomes a limit order.
Trailing stop order
A trailing stop order is a stop order that is set at a fixed percentage or dollar amount below the market price of a security. It is designed to limit an investor’s loss in security. When the stock price falls by the trailing amount, it becomes a market order.
Market if touched order
A market-if-touched (MIT) order is to buy or sell a security at a specified price. Short-term traders and scalpers typically use this order.
Fill or kill order
A fill or kill order is an order to buy or sell a security that must be executed immediately and wholly, or it will be cancelled.
Immediate or cancel orders.
An immediately or cancel (IOC) order is an order to buy or sell a security that must be executed immediately. If there is any portion of the order that cannot be filled immediately will be cancelled.
Limit on close order
A limit on close (LOC) order is buying or selling a security at a specified price. This order is executed at the closing price.
Market on close order
A market on close (MOC) order is an order to buy or sell a security at the market price. This order is executed at the closing price.
Good till cancelled order
Good till cancelled (GTC) order is an open-ended order to buy or sell a security at a specified price. This order remains in the system until it is cancelled by the investor or filled.
How to start using market orders?
If you’re not familiar with market orders, don’t worry. It’s easy to get started. Here are the steps:
Choose the security you want to trade.
Firstly you need to choose security to trade. It can be anything from stocks and shares to Forex or commodities.
Decide how many you want to buy or sell.
Once you’ve chosen your security, you need to decide how many you want to buy or sell. If you’re not sure, it’s best to start small.
Choose the type of market order.
Now you need to choose the type of market order. As we’ve seen, there are ten types to choose from
Enter the details of your order
Next, you need to enter the details of your order. It will include the type of order, the limit price (if applicable), and the stop price (if applicable)
Submit your order
Once you’ve entered all the details, hit submit, and your order will be placed.
In conclusion
Market orders are a simple yet powerful way to trade securities. You can get into and out of positions quickly and easily without worrying about the price by using market orders. However, it’s important to remember that market orders can also lead to losses if the stock moves against you. So always use limit orders when possible to protect your downside.
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