Market Orders

A market order is a buy or sell order to be executed immediately at current market prices. This order type does not allow any control over the price. The order is filled at the best price available at the relevant time.

As the price paid or received depends on the market liquidity the order may be slipped to a worse or better price than the last look from when the order was entered.

Limit Orders

A limit order is an order to buy or to sell at a specified price or better. This gives the trader control over the price at which the trade is filled, the order may never be filled.

Limit orders are used to place an order in the market a specific price and to place a take profit order at a specific price level.

  • Limit orders to buy can only be placed below the current market price.
  • Limit orders to sell can only above the current market price.

Limit orders are always filled at the limit price or better, as well as when market gaps beyond the limit price.

Stop Orders

Stop Orders are typically used to limit losses at a certain price level. Stop orders are typically filled at the stop level selected by the client.

A Stop Loss Order, is an order to buy or sell once the price reaches a specified price or stop price. When the stop price is reached, and the stop order becomes a market order, this means the trade will definitely be executed, but not necessarily at or near the stop price, particularly when the order is placed into a fast-moving market, or if there is insufficient liquidity available relative to the size of the order.

A Trailing Stop Loss is entered with a stop parameter that creates a trailing trigger price. This parameter is entered with a distance to market measured in either pips or points. Trailing Stop Loss is used to maximize and protect profit as an instrument price rises and limit losses when its price falls.

A Buy Stop Order is entered at a stop price above the current market price. A buy stop order is triggered when the ask price is equal to or higher than the stop price specified or when an execution occurs at the stop price. Buy stop is to enter the market when he stop price conditions are meet.

A Sell Stop Order is entered at a stop price below the current market price. A sell-stop order is triggered when the bid price is equal to or less than the stop price specified or when an execution occurs at the stop price. Sell stop is to enter the market when he stop price conditions are meet.

Quoted Order

A Quoted order is a buy or sell order to be executed immediately. This order type takes a “last look” at the previously quoted price and fills the order only if the price is still available at the relevant time.

Conditional Orders

One-Cancels-the-Other (OCO)

One-Cancels-the-Other (OCO) orders are used when the trader wishes to capitalize on only one of two or more possible trading possibilities.

One-Trigger-the-Other (OTO)

One-Cancels-the-Other (OCO) orders are used when the trader wishes to create a chain of two or more orders. When one order is executed, the next order in the chain is being placed, then when this new order is executed another order may be placed.

Time in Force

A day order or good for day order (GFD) is the most commonly used for market and limit orders. GFD is in force from the time the order is submitted to the end of the day’s trading session.

For equity markets, the closing time is defined by the exchange. For the foreign exchange market, this is until 5 p.m. ET.

Good-till-cancelled (GTC) orders require a specific cancelling order, which can persist indefinitely or up to 90 days which is the normal for many brokers and exchanges.

An Immediate-or-Cancel (IOC) orders are immediately executed or cancelled by the broker or the exchange. Unlike FOK orders, IOC orders allow for partial fills.

Fill-or-Kill (FOK) orders are usually limit orders that must be executed or cancelled immediately. Unlike IOC orders, FOK orders require the full quantity to be executed.

Time-Frame is in force for a short period of time from the time the order is submitted. The time-frame can be specified in seconds, minutes and hours.

Partial fills

The result where only a portion of an order was filled. For example, less than the indicated amount was bought or sold at a stipulated price limit.