Order Types

Question 1

Buy Limit meaning

Answer 1

Buy limit orders provide investors and traders with a means of precisely entering a position.

Question 2

Sell limit meaning

Answer 2

A sell limit order will execute at the limit price or higher. Overall, a limit order allows you to specify a price. A stop order includes a specific parameter for triggering the trade. Once a stock’s price reaches the stop price it will be executed at the next available market price.

Question 3

Buy stop meaning

Answer 3

A buy stop order is an order to purchase a security only once the price of the security reaches the specified stop price. The stop price is entered at a level, or strike, set above the current market price. It is a strategy to profit from an upward movement in a stock’s price by placing an order in advance.

Question 4

Sell stop meaning

Answer 4

A sell stop order is entered at a stop price below the current market price. If the stock drops to the stop price (or trades below it), the stop order to sell is triggered and becomes a market order to be executed at the market’s current price. This sell stop order is not guaranteed to execute near your stop price.

Question 5

At market meaning

Answer 5

An at-the-market order buys or sells a stock (or a futures contract) at the prevailing market bid or ask price at the time it gets processed. An at-the-market order is a type of market order, an instruction by an investor to a broker to buy or sell an asset at the best available price in the current financial market