1.Market Order, This Order simply tells the broker to buy or sell a stock at whatever price the stock is trading at. This can be beneficial if you just want to get in and out of a position.
2.Limit Order, This tells your broker only to buy or sell a security if a certain level is reached. For example if a stock is trading at $30 and you place a limit order to buy at $25 that means you will not buy the security unless it goes to $25 or lower. This can be beneficial if you want a stock to break above a certain level before entering it.
3.Stop Order, This order turns into a market order once a stock hits a given price. This can be ideal if you are already in a position and want to put a limit on the amount you can lose.
4.Stop Limit order, this is an order that turns into a limit order once a target price is hit. This is similar to a stop order except the stock does not sell right away if the stop is hit. For this order to be filled it must also meet the conditions of the limit order.
5.Contingency Order, This order allows you to buy or sell a given security based on a given condition.
6.Trailing Stop, This is when you want to follow a given security up. For instance you buy a stock at $50 and put a trailing stop $3 lower than the stock. The stop will move up with the stock. So if the stock goes to $59 the stop will be at $56.
Don’t let all of these order types scare you; you can get the hang of them in time. If you are just starting out in the stock market remember to keep it simple. Market orders are the easiest way to enter a position. Using a stop can be the easiest way to exit a position. It all comes down to your strategy and what you are trying to accomplish.
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