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There are quite a few ORDER TYPES on the Stock Market. The two most common orders used to open a position are the Market Order, and the Limit Order.

A Market Order is one of the most common types of orders in the investment community.

In a "Market Order" you are guaranteed a "FILL", but not guaranteed a price.

So for example, you tell your broker to BUY100 EBAY at the MARKET.

this means, buy me Ebay at the Current Price on the Floor Now.

The broker goes and executes the buy at the market price. You find out what that price is when he reports back. So in essence you actually own the stock before you know what you paid.

If price is a concern there is another very often used order type known as a LIMIT ORDER.

A LIMIT ORDER, also known as an "OR BETTER" order is a type of buy or sell order. It is a very commonly used Order Type.

A Limit Orders key feature is that you are NOT guaranteed a fill, but if filled you are guaranteed a price.

For example, you might place an order to BUY IBM at "$25 or better", (You can also say Buy IBM at $25Limit, it means the same thing). You are instructing the broker to BUY you IBM at a price of $25 or less. Note that if IBM never trades 25 your order will be canceled at the end of the day*.

On the Sell side, "Or better" is more. So for example, Sell IBM at $25LIMIT means get me $25 or more. So you will wind up with $25 or more IF you are filled, but if the opportunity does not occur in the market that day, the order will be canceled at the days end* and you will still have your IBM.

*All orders are DAY ORDERS, meaning one day, unless otherwise specified. The most common specification is the acronym GTC (Good 'til Canceled.)

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