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A buy limit order above market price is an instruction to purchase a stock at a specific price that is higher than the current market price. This order will only be executed if the stock's price reaches the specified limit price or lower. It allows traders to set a maximum price they are willing to pay for a stock, helping them control their purchase price and potentially secure a better deal.
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How many types of trade are there?
All trades are made up of separate orders, that are used together to make a complete trade. All trades consist of at least two orders (one buy and one sell order), usually with one order to enter the trade, and one or more orders to exit the trade. A single order is either a buy order or a sell order, and an order can be used either to enter a trade or to exit a trade. If a trade is entered with a buy order, then it will be exited with a sell order, and vice versa. For example, if a trader expected the market's price to go up, the simplest trade would consist of one buy order to enter the trade, and one sell order to exit the trade. Conversely, if a trader expected the market's price to go down, the simplest trade would consist of one sell order to enter the trade, and one buy order to exit the trade. If this last example seems backwards, see the shorting entry in the trading glossary for an explanation. Traders have access to many different types of orders that they can use in various combinations to make their trades. The following explanations will explain each of the order types, and how these orders are used in trading. Note that many traders do not fully understand all of these order types, and they may seem slightly abstract at first, but their use will become clearer once you start to use them in your trading. Market Orders (MKT) Market orders are orders to buy or sell a contract at the current best price, whatever that price may be. In an active market, market orders will always get filled, but not necessarily at the exact price that the trader intended. For example, a trader might place a market order when the best price is 1.2954, but other orders might get filled first, and the trader's order might get filled at 1.2956 instead. Market orders are used when you definitely want your order to be processed, and are willing to risk getting a slightly different price. Limit Orders (LMT) Limit orders are orders to buy or sell a contract at a specific or better price. Limit orders may or may not get filled depending upon how the market is moving, but if they do get filled it will always be at the chosen price, or at a better price if there is one available. For example, if a trader placed a limit order with a price of 1.2954, the order would only get filled at 1.2954 or better, if it got filled at all. Limit orders are used when you want to make sure that you get a suitable price, and are willing to risk not being filled at all. Stop Orders (STP) Stop orders are similar to market orders, in that they are orders to buy or sell a contract at the best available price, but they are only processed if the market reaches a specific price. For example, if the market price is 1.2567, a trader might place a buy stop order with a price of 1.2572. If the market then trades at 1.2572 or above, the trader's stop order will be processed as a market order, and will then get filled at the current best price. Stop orders are processed as market orders, so if the stop (or trigger) price is reached, the order will always get filled, but not necessarily at the price that the trader intended. Stop orders will trigger if the market trades at or past the stop price, so for a buy order, the stop price must be above the current price, and for a sell order, the stop price must be below the current price. Stop Limit Orders (STPLMT) Stop limit orders are a combination of stop orders and limit orders. Like stop orders, they are only processed if the market reaches a specific price, but they are then processed as limit orders, so they will only get filled at the chosen price, or a better price if there is one available. For example, if the current price is 1.2567, a trader might place a buy stop limit order with a price of 1.2572. If the market trades at 1.2572 or above, the stop limit order will be processed as a limit order. If the market continues to trade at 1.2572, the limit order will get filled at 1.2572 or at a better price if there is one available. Stop limit orders may or may not get filled depending upon whether or not the market reaches the chosen price, and then depending upon how the market moves. Stop limit orders will trigger if the market trades at or past the stop price, so for a buy order, the stop price must be above the current price, and for a sell order, the stop price must be below the current price. Market if Touched Orders (MIT) Market if touched orders are identical to stop orders, except that they are used when the market price has already traded past the stop price, and the trader only wants the order to be processed if the market price comes back to the stop price. For example, if the market price is 1.3010, and the trader places a buy market if touched order with a price of 1.3001, the order will only be processed if the market trades at or below 1.3001. If the order is processed, it will be processed as a market order, and will get filled at the current best price. Market if touched orders will trigger the opposite way than a stop order, so for a buy order, the trigger price must be below the current price, and for a sell order, the trigger price must be above the current price. Limit if Touched Orders (LIT) Limit if touched orders are identical to stop limit orders, except that they are used when the market price has already traded past the stop price, and the trader only wants the order to be processed if the market price comes back to the stop price. For example, if the market price is 1.3010, and the trader places a buy market if touched order with a price of 1.3001, the order will only be processed if the market trades at or below 1.3001. If the order is processed, it will be processed as a limit order. If the market continues to trade at 1.3001, the limit order will get filled at 1.3001 or at a better price is there is one available. Limit if touched orders will trigger the opposite way than a stop limit order, so for a buy order, the trigger price must be below the current price, and for a sell order, the trigger price must be above the current price
What is a sell short limit order and how can it be used in trading?
A sell short limit order is a type of order placed by an investor to sell a stock at a specific price or higher, after borrowing it from a broker. This order is used in trading to profit from a stock's potential decline in value.
Can you explain how a stop order works in trading?
A stop order is a type of trade order that is set at a specific price point. When the market reaches that price point, the stop order is triggered and the trade is executed. This is used to limit losses or lock in profits for investors.
What is the difference between a maker fee and a taker fee in the context of trading?
A maker fee is charged when a trader adds liquidity to the market by placing a limit order that is not immediately filled, while a taker fee is charged when a trader removes liquidity by placing a market order that is immediately filled.
Can you explain how a limit sell order works in trading?
A limit sell order is a type of order in trading where you set a specific price at which you want to sell a stock. Once the stock reaches that price, the order is automatically executed. This allows you to control the price at which you sell your stock, potentially maximizing your profits.
How many types of trade are there?
All trades are made up of separate orders, that are used together to make a complete trade. All trades consist of at least two orders (one buy and one sell order), usually with one order to enter the trade, and one or more orders to exit the trade. A single order is either a buy order or a sell order, and an order can be used either to enter a trade or to exit a trade. If a trade is entered with a buy order, then it will be exited with a sell order, and vice versa. For example, if a trader expected the market's price to go up, the simplest trade would consist of one buy order to enter the trade, and one sell order to exit the trade. Conversely, if a trader expected the market's price to go down, the simplest trade would consist of one sell order to enter the trade, and one buy order to exit the trade. If this last example seems backwards, see the shorting entry in the trading glossary for an explanation. Traders have access to many different types of orders that they can use in various combinations to make their trades. The following explanations will explain each of the order types, and how these orders are used in trading. Note that many traders do not fully understand all of these order types, and they may seem slightly abstract at first, but their use will become clearer once you start to use them in your trading. Market Orders (MKT) Market orders are orders to buy or sell a contract at the current best price, whatever that price may be. In an active market, market orders will always get filled, but not necessarily at the exact price that the trader intended. For example, a trader might place a market order when the best price is 1.2954, but other orders might get filled first, and the trader's order might get filled at 1.2956 instead. Market orders are used when you definitely want your order to be processed, and are willing to risk getting a slightly different price. Limit Orders (LMT) Limit orders are orders to buy or sell a contract at a specific or better price. Limit orders may or may not get filled depending upon how the market is moving, but if they do get filled it will always be at the chosen price, or at a better price if there is one available. For example, if a trader placed a limit order with a price of 1.2954, the order would only get filled at 1.2954 or better, if it got filled at all. Limit orders are used when you want to make sure that you get a suitable price, and are willing to risk not being filled at all. Stop Orders (STP) Stop orders are similar to market orders, in that they are orders to buy or sell a contract at the best available price, but they are only processed if the market reaches a specific price. For example, if the market price is 1.2567, a trader might place a buy stop order with a price of 1.2572. If the market then trades at 1.2572 or above, the trader's stop order will be processed as a market order, and will then get filled at the current best price. Stop orders are processed as market orders, so if the stop (or trigger) price is reached, the order will always get filled, but not necessarily at the price that the trader intended. Stop orders will trigger if the market trades at or past the stop price, so for a buy order, the stop price must be above the current price, and for a sell order, the stop price must be below the current price. Stop Limit Orders (STPLMT) Stop limit orders are a combination of stop orders and limit orders. Like stop orders, they are only processed if the market reaches a specific price, but they are then processed as limit orders, so they will only get filled at the chosen price, or a better price if there is one available. For example, if the current price is 1.2567, a trader might place a buy stop limit order with a price of 1.2572. If the market trades at 1.2572 or above, the stop limit order will be processed as a limit order. If the market continues to trade at 1.2572, the limit order will get filled at 1.2572 or at a better price if there is one available. Stop limit orders may or may not get filled depending upon whether or not the market reaches the chosen price, and then depending upon how the market moves. Stop limit orders will trigger if the market trades at or past the stop price, so for a buy order, the stop price must be above the current price, and for a sell order, the stop price must be below the current price. Market if Touched Orders (MIT) Market if touched orders are identical to stop orders, except that they are used when the market price has already traded past the stop price, and the trader only wants the order to be processed if the market price comes back to the stop price. For example, if the market price is 1.3010, and the trader places a buy market if touched order with a price of 1.3001, the order will only be processed if the market trades at or below 1.3001. If the order is processed, it will be processed as a market order, and will get filled at the current best price. Market if touched orders will trigger the opposite way than a stop order, so for a buy order, the trigger price must be below the current price, and for a sell order, the trigger price must be above the current price. Limit if Touched Orders (LIT) Limit if touched orders are identical to stop limit orders, except that they are used when the market price has already traded past the stop price, and the trader only wants the order to be processed if the market price comes back to the stop price. For example, if the market price is 1.3010, and the trader places a buy market if touched order with a price of 1.3001, the order will only be processed if the market trades at or below 1.3001. If the order is processed, it will be processed as a limit order. If the market continues to trade at 1.3001, the limit order will get filled at 1.3001 or at a better price is there is one available. Limit if touched orders will trigger the opposite way than a stop limit order, so for a buy order, the trigger price must be below the current price, and for a sell order, the trigger price must be above the current price
What is a sell short limit order and how can it be used in trading?
A sell short limit order is a type of order placed by an investor to sell a stock at a specific price or higher, after borrowing it from a broker. This order is used in trading to profit from a stock's potential decline in value.
What is the difference between a market order and a limit order?
A market order is one in which your buy/sell request is executed at the current market price of that share A limit order is one in which your buy/sell request is executed only when the market price of the stock equals the limit price you set Example: Assuming stocks of XYZ ltd are trading at Rs. 100 and you place a market order for 10 shares then, 10 shares of XYZ limited would be bought for you at the price of 100 per share + the brokerage & taxes If you place a limit order for the same at Rs. 95 and the price of XYZ starts going down, the moment the price of XYZ limited touches 95 your order would be executed and 10 shares of XYZ at Rs. 95 per share would be bought for you.
Can you explain how a stop order works in trading?
A stop order is a type of trade order that is set at a specific price point. When the market reaches that price point, the stop order is triggered and the trade is executed. This is used to limit losses or lock in profits for investors.
What is the difference between a maker fee and a taker fee in the context of trading?
A maker fee is charged when a trader adds liquidity to the market by placing a limit order that is not immediately filled, while a taker fee is charged when a trader removes liquidity by placing a market order that is immediately filled.
Stock market limit orders?
A Limit order is one that would get executed the moment the price of the stock reaches your limit value. Lets say you want to by shares of XYZ limited and its trading now at $100 per share. You are expecting it to come down but still you want to buy and hence you place a limit order at $90 per share. When the share price comes down and at the moment it touches $90 per share your order would get executed and those shares would be bought against your name. If the share does not reach $90 by the end of the trading day, your order stands null and void.
Can you explain how a limit sell order works in trading?
A limit sell order is a type of order in trading where you set a specific price at which you want to sell a stock. Once the stock reaches that price, the order is automatically executed. This allows you to control the price at which you sell your stock, potentially maximizing your profits.
Where could one find trading tips for dealing on the stock market?
There are several different options in order to find trading tips for trading on the stock market. Some examples for websites include "StockTradingTogo", "InvestmentU" or "Investopedia".
What is the difference between a stop order and a stop limit order on the thinkorswim platform?
A stop order becomes a market order when the stock reaches a certain price, while a stop limit order becomes a limit order when the stock hits a specified price.
What are the different kinds of cfd trading platforms?
"CFDs can be traded on any platform that allows for stock trading, but specialized platforms do exist. The best allow for limit, stop, and/or market orders after hours, stop entry order support, CFD-specific charts and reports, and CFD-specific accounting."
What is the difference between a limit order and a stop order in trading?
A limit order is a request to buy or sell a stock at a specific price or better, while a stop order is a request to buy or sell a stock once it reaches a certain price.
What is the difference between a stop loss and a stop limit order in trading?
A stop loss order is a type of order that automatically sells a stock when it reaches a certain price to limit losses. A stop limit order is similar, but it only sells the stock at a specific price or better after reaching the stop price.
