Stock order

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A stock order is an order that an investor places in order to buy or sell an asset in the market and execute its operation.

Types of stock orders

The most common orders on the Stock Exchange are the following:

Market order

It is a more aggressive order that seeks to attack the price. It guarantees the execution of all titles or contracts without guaranteeing an exact execution price.

Limited Order

It is a more conservative order, since it guarantees a maximum purchase price or a minimum sale price, but not the execution of all the titles or contracts entered. Generally, the maximum validity of this type of order is usually 90 days.

Stop order

It is an operation that is sent to the stock market when the price condition established by the investor is met, which may be "greater or equal" (stop profit) or "less or equal" (stop loss) than a quoted price (called the condition of activation). The order that is sent to the market will be a limit order at a price or a market order, informed by the investor when the order is registered, and with the same validity as the stop order. It is important to mention that a stop order pending shipment will be activated when, having fulfilled the activation condition, the reported price of said value changes.

There are the following types of stop orders:

  1. Dynamic Stop: It is a sell order that is sent to the market when a defined condition is met. This condition is a% fluctuation of the listing price or a variation thereof. The order that is sent to the market will be a market order.
  2. Related stop: The related stop order is made up of two interrelated sell stop orders, in such a way that the activation of one of them immediately causes the total cancellation of the other. The order that is sent to the market will be a limit order at a price or a market order.

Conditional order

It is a type of order established under a condition. It is important to mention that several conditions or restrictions cannot be combined with each other, and the validity period is usually that of the session.

The conditions can be of different types:

  • Terms
    • All or nothing: The order is sent to the market if there are enough securities for it to be fully executed. If there are not enough securities to execute at the marked price or better, the order is voided.
    • Execute and cancel: The order is sent to the market, executing the available titles and canceling the remaining volume. This condition can only be established with the open market and for limit change orders that attack market prices.
  • Restrictions
    • Minimum volume: The order is sent to the market if there is a minimum volume of securities to be executed. If there is that minimum but the entire order is not executed, the part not executed remains positioned at the limit change established. If there are no titles for that minimum marked to be executed, the order is automatically canceled.
    • Titles to show: The order is sent to the market allowing the possibility of choosing the number of titles that we want to be able to see. The volume of titles to show cannot be less than 250. When the titles shown are executed, a new order is generated to the market, which is placed in the queue in the price.

Tags:  markets banks USA 

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