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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.
What else can I help you with?
What are the buying and selling options available for same-day transactions?
For same-day transactions, buying and selling options include market orders, limit orders, and stop orders. Market orders allow immediate purchase or sale at the current market price. Limit orders set a specific price at which to buy or sell. Stop orders trigger a market order once a certain price is reached.
What are the exercise options available through ETRADE?
ETRADE offers a variety of exercise options for trading stocks, including market orders, limit orders, stop orders, and more.
What is the maximum potential for a stock to increase in value?
The maximum potential for a stock to increase in value is unlimited, as there is no set limit to how much a stock price can rise in the stock market.
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 are my options for selling stock?
A few options for selling your stock are market order (it becomes immediately executed at the current market price), limit order (it is executed at the price you set).
What are some strategies for finding and utilizing cheap option contracts in the stock market?
One strategy for finding cheap option contracts in the stock market is to look for options with a low premium price relative to the underlying stock's price. This can be done by comparing the option's strike price to the current stock price and evaluating the implied volatility of the option. Additionally, utilizing limit orders and timing your trades during periods of low market volatility can help you secure cheaper option contracts.
Can you explain how a buy limit order works in the stock market?
A buy limit order is an instruction to purchase a stock at a specific price or lower. This order will only be executed if the stock's price reaches the specified limit price or lower. It allows investors to control the price at which they are willing to buy a stock, helping them to potentially get a better deal.
What is a buy limit order above market price and how does it work in trading?
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.
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 is the difference between maker and taker fees in trading platforms?
Maker fees are charged to traders who provide liquidity to the market by placing limit orders that are not immediately filled, while taker fees are charged to traders who take liquidity from the market by placing market orders that are immediately filled.
What is the difference between maker fees and taker fees in the context of cryptocurrency trading?
Maker fees are charged to traders who provide liquidity to the market by placing limit orders that are not immediately filled. Taker fees are charged to traders who remove liquidity from the market by placing market orders that are immediately filled.
What are the order type in the stock market and its meaning?
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.)
