order system

8/4/2019 Order System

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Stock Market Order Types...

Buy Stop Order

Buy Stop Limit Order

Buy to Cover Stop Order

Sell Limit Order

Sell Short Limit Order

Market Order

Buy Limit Order

Buy to Cover Limit Order

Sell Stop Order

Sell Short Stop Order

Sell Stop Limit Order


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Buy Stop Order

A Buy Stop Order is an order to buy a stock at a price above

the current market price. Once a stock's price trades at orabove the price you have specified, it becomes a Market

Order to buy.

Example: Suppose you are looking to buy 100 shares of

Intel (INTC) if the stock's price shows that it wants to go up.Assume INTC is currently trading at $20 per share and you

believe that if the price rises to $22 or higher there will be

continued upward momentum. You place a Buy Stop Order

@ $22 on INTC.Suppose INTC then proceeds to trade up to $22. At that

time, your order would become a Market Order to buy and

your order would be filled at the next best available price


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Buy Stop Limit Order

An order that combines the features of a Buy Stop Order with those of a

limit order. A Buy Stop Limit Order will be executed at a specified price

(or lower) after a given stop price has been reached.Once the stop price is reached, the order becomes a Buy Limit Order,

filled at the limit price specified or lower.

Example: Suppose you are looking to buy 100 shares of MicroSoft Corp

(MSFT) if the stock's price shows some upward momentum. Assume

MSFT is currently trading at $30 per share. You place a Buy Stop Limit

Order for $33 on MSFT, with a Limit (maximum you're willing to pay) at

$33.50.

Suppose MSFT then proceeds to trade up to $33. At that time, your

order would become a Buy Limit Order and your order would be filledas long as the stock still trades below your specified limit price of

$33.50.


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Buy to Cover Stop Order

A Buy to Cover Stop Order is very similar to a Buy Stop Order, the only

difference being this type of order is used to exit a Short position rather

than enter a Long position.

A Buy to Cover Stop Order is an order to cover (repurchase the shares

you have borrowed) at a price above the current market price. Once a

stock's price trades at or above the price you have specified, it becomesa Market Order to buy (cover).

Example: Suppose you currently have Sold Short 100 shares of Apple

Computer (AAPL) at $160 and the stock's price is currently at $150. You

want to protect yourself against a large move higher to guarantee

yourself some of your current profit ($10/share).You place a Buy to Cover Stop Order @ $155 on AAPL. Suppose AAPL

then proceeds to trade up to $155. At that time, your order would

become a Market Order to buy (cover) and your order would be filled

at the next best available price


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Sell Limit Order

A Sell Limit Order is an order to sell a specified number of shares of a

stock that you own at a designated price or higher, at a price that is

above the current market price. This is your limit price, in other words,the minimum price you are willing to accept to sell your shares.

Once a stock's price trades at or above the price you have specified,

your shares will be sold at that price or higher IF the stock's price

continues to trade at or above your specified price long enough for your

order to be filled.

Example: Suppose you own 100 shares of Target Corp (TGT), and it is

currently trading at $45 per share. You would like to sell the shares and

take your profits if the stock's price reaches $50 per share, as you feel

the stock's price is not going to go much higher than $50.You place a Sell Limit Order @ $50 on 100 shares of TGT. Now suppose

the price trades up to $50. As long as the price remains above $50 per

share, your shares would then be sold at the next best available price

that is $50 per share or higher.


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Sell Short Limit Order

A Sell Short Limit Order is an order to sell short a specified number of

shares of a stock at a designated price or higher, at a price that is above

the current market price. The limit price that you specify is theminimum price you are willing to accept to sell short.

Once a stock's price trades at or above the price you have specified, you

will enter a new Short position at your limit price or higher IF the stock's

price continues to trade at or above your specified price long enough for

your order to be filled.

Example: Suppose you want to sell short 100 shares of Cisco Systems

(CSCO), and it is currently trading at $25 per share. You would like to

sell short if the stock's price reaches $27 per share, as you feel the

stock's price is not going to go much higher than $27 and will likely fallfrom there.

You place a Sell Short Limit Order @ $27 on 100 shares of CSCO. Now

suppose the price trades up to $27. As long as the price remains above

$27 per share, you would then enter a new short position at the next

best available price that is $27 per share or higher


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Market Order

A Market Order is an order to buy or sell a specified

number of shares at a price close to the current market

price.

Once your order is placed, your order will then be filled

at the next best available price at or around the stock's

current price.

Example: Suppose you want to buy 100 shares of Adobe

Systems (ADBE), and it is currently trading at $30 per

share. You would like to enter the position as close as

possible to the current price ($30).

You place a Market Order to Buy 100 shares of ADBE.

Now your broker will purchase 100 shares of ADBE

stock at the next best available price, such as $30.10.


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Buy Limit Order

A Buy Limit Order is an order to buy a specified number of shares of a

stock at a designated price or lower, at a price that is below the

current market price. Your limit price, in other words, is the maximumprice you are willing to pay to purchase your shares.

Once a stock's price trades down to or below the price you have

specified, your shares will then be purchased at that price or lower IF

the stock's price continues to trade at or below your specified price

long enough for your order to be filled.Example: Suppose you want to own 100 shares of Ebay Inc. (EBAY),

and it is currently trading at $30 per share. You would like to buy the

shares if the stock's price drops to $27 or less, as you feel the stock's

current price of $30 per share is slightly overvalued.

You place a Buy Limit Order @ $27 on 100 shares of EBAY. Now

suppose the price trades down to $27. As long as the price remains

below $27 per share, your shares would then be bought at the next

best available price that is $27 per share or lower


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Buy to Cover Limit Order

A Buy to Cover Limit Order is an order used to attempt to cove

(close) a currently open short position at a price that is lowe

than the current market price.

Example: Suppose you currently hold 100 shares of Pfize

(PFE) that you previously Sold Short @ $30 per share. Assum

it is currently trading at $25 per share. You would like to exi

the trade (cover) and take profit if it reaches $22 or less.

You place a Buy to Cover Limit Order @ $22 on 100 shares o

PFE. Now suppose the price trades down to $22. As long a

the price remains below $22 per share, your short positio

would then be closed at the next best available price that i

$22 per share or lower, representing a profit of at least $8 pe

share ($30-$22)


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Sell Stop Order

A Sell Stop Order is an order to sell a stock at a price below the current

market price. Once a stock's price trades at or below the price you have

specified, it becomes a Market Order to sell. A Sell Stop Order is also

commonly referred to as a Sell Stop/Loss Order.

Please note that is very similar to a Sell Short Stop Order, the only

difference being a Sell Short Stop Order is used to ENTER a new short

position, while a Sell Stop Order is used to EXIT an existing long position.Example: Suppose you own 100 shares of Wal-Mart Stores (WMT) and

you are worried that if the price falls a few more dollars that it will

trigger the beginning of a much larger decline. Assume WMT is

currently trading at $50 per share.

You place a Sell Stop Order @ $48 on WMT. Suppose WMT thenproceeds to trade down to $48. At that time, your order would

become a Market Order to sell and your order would be filled at the

next best available price


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Sell Short Stop Order

A Sell Short Stop Order is an order to Sell Short a stock at a price below

the current market price. Once a stock's price trades at or below the

price you have specified, it becomes a Market Order to sell short.

Please note that is very similar to a Sell Stop Order, the only difference

being a Sell Short Stop Order is used to ENTER a new short position,

while a Sell Stop Order is used to EXIT an existing long position.

Example: Suppose you want to Sell Short 100 shares of Xerox Corp(XRX) if the price falls $2 more, since you believe that this will trigger

the beginning of a much larger decline. Assume XRX is currently

trading at $15 per share.

You place a Sell Short Stop Order @ $13 on XRX. Suppose XRX then

proceeds to trade down to $13. At that time, your order would thenbecome a Market Order to Sell Short and your order would be filled at

the next best available price


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Sell Stop Limit Order

A Sell Stop Limit Order is an order that combines the features of a Sell

Stop Order with those of a limit order. A Sell Stop Limit Order will be

executed at a specified price (or above) after a given stop price has beenreached.

Once the stop price is reached, the order becomes a Sell Limit Order,

filled at the limit price specified or higher.

Example: Suppose you own 100 shares of Bank of America (BAC) and

you are looking to sell them if the stock's price falls a bit lower.Assume BAC is currently trading at $45 per share. You place a Sell Stop

Limit Order for $41 on BAC, with a Limit (minimum you're willing to

accept) at $40.

Suppose BAC then proceeds to trade down to $41. At that time, yourorder would become a Sell Limit Order and your order would be filled

at the next best available price as long as the stock still trades above

your specified limit price of $40.

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