Post by fastwalker on Oct 2, 2004 20:17:23 GMT -5
Market
Choosing the term of Market indicates that you wish to seek an immediate execution for this order at the current market price, provided a buyer or seller is available. Buy orders will usually execute near the ask price, and sell orders will usually execute near the bid price.
Limit
Choosing the terms of Limit indicates that you wish to seek the purchase or sale of a stock at a specific price or better. To place a Limit order, you must specify a price at which you wish the order to be filled.
If the stock trades at your price, do not assume that your order has been executed. However, if the security "trades through" your price, your order may have been executed.
Confusion may arise when Over-the-Counter (OTC) limit orders do not execute. Although a last trade on an OTC stock may have been at or through your limit price, the order may not necessarily be entitled to an execution. Buyers should reference the ask price and sellers should reference the bid price. OTC quotation listings in newspapers may be last bid, last ask, or in between.
Limit orders may be set to expire at the end of the trading day (Day) or the end of the following month (GTC - Good-Til-Canceled). « <br>
Stop
Choosing the terms of Stop indicates that you want your order to become a Market order once a specific "stop" price has been reached. Once the order becomes a Market order, it will then seek an immediate execution, with buy orders usually executing near the current ask price and sell orders executing near the current bid price. The Stop order is designed to protect against potential loss by liquidating (or covering) a position (or partial position) if the market price changes in a direction that negatively affects the position's valuation. Stop orders are accepted on listed stocks, most options, and selected Over-the-Counter (OTC) stocks.
