Stock Order Types- Limit Orders, Market Orders, Stop Orders
Stock Order Types- Limit Orders, Market Orders, Stop Orders

Stock Order Types- Limit Orders, Market Orders, Stop Orders

The vast majority of retail investor accounts lose money when trading CFDs . You should consider whether you can afford to take the high risk of losing your money.
A stock order is an instruction to buy or sell on the stock market. The instruction can be straightforward or complex, depending on the situation or the nature of the investment. Understanding the different types of stock orders that you can place is the key to building a solid portfolio.
Here are the three main types of stock orders:
Limit Orders- if you want to buy or sell stocks only at a specific price, then you should choose limit orders. If you are seeking to buy a stock, you need to specify a lower limit and if you want to sell, you need to specify a higher limit. It may take time to trigger the limit order, whether it’s a week, a month or even a year. If everything works out according to your plan, you can buy a stock at or below your desired price. Because limit orders allow you to exceed the specified prices, it is possible to buy below the market price or sell above the market price. It is important that you don’t lose the window, so you won’t miss out on trading opportunities.
Market Orders- with market orders, you can buy and sell stocks at the next available price immediately. Market orders are fast and efficient, but that doesn’t guarantee that your fill price will be favourable. The price that you get may not be the same with the price on the screen when you hit the Buy or Sell button. Because the market could fluctuate rapidly, it is more likely that it’s close to your target price and this called slippage. When choosing market orders, you should be careful when dealing with thinly traded stocks with wide difference between ask and bid prices. These stocks are prone to bigger slippage. If the market is highly volatile, asks and bids could also fluctuate wildly.
Stop Orders- a stop order is used when a trader wants to protect or minimise the loss of an open position, be it long or short. In the event of holding on a long position, a level below the existing market price can be selected in order to reduce the amount of loss on the trade. Likewise, with a short position, a stop loss order above the present market price is chosen to limit the losses. Stop Loss orders are not guaranteed, however. In volatile markets if the desired stop loss level cannot be achieved, the next available price will be triggered.
Contact CFI Financial
To learn more about investing in today’s global markets, contact CFI Financial today and speak with an investment advisor who can answer any questions that you might have.
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CFI Financial Group is an award winning global financial markets provider with over 23 years of experience and regulated entities in several jurisdictions, focused on offering impeccable execution and trading conditions including very low spreads, professional services, dedicated support and powerful tools.
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CFI provides execution-only services and does not provide any investment advice. To make an investment decision, you cannot rely on the content of this website, or on any information, opinion, report or other materials (“Information”) you receive from CFI, or its representatives. Such Information is general and does not consider your objectives and your financial situation, thus they shall not be considered in any way as an express or implied promise nor a guarantee of any profit or limit of loss. CFI shall not bear any liability in case you used or relied on such Information. Please ensure that you make your own research and seek independent advice if necessary.

Forex and CFDs are leveraged products that incur a high level of risk. A small adverse market movement may expose the client to lose the entire invested capital. The majority of retail client accounts lose money when trading in CFDs. Please be aware of trading risks and that you could sustain a loss exceeding your deposited funds, even if a stop loss is used.

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