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12/01/2022

Different stock market order types

What are the various stock market orders ?

Depending on the stocks you have in your portfolio, the liquidity of the type of market you are trading in and your time constraints for entering or exiting a position, you can opt for different types of orders. Which one is best for your situation? Here is a guide that will help you better understand the stock market and stock market orders.

Market orders

This type of order takes precedence over all others and allows you to buy shares directly at the best price available on the market. However, the final execution price is never guaranteed. When you enter a market order, you do not need to enter anything in the "price" field.

Limit orders

A limit order is more precise and enables you to set a price limit, both for buying and selling. This is the most common type of order on the stock market. While it offers you more security as to the purchase or sale price, you have no guarantee that it will be executed. In addition to entering the quantity of securities you wish to buy, you will have to fill in the "price" field.

Let's take a concrete example: you want to buy a stock at a limited price of 100 euros. This means that your order will not be executed as long as the share price remains above this value.

Stop orders or stop range orders

With a stop loss order, you set a price range within which your order will be executed. It only becomes valid when the price crosses a certain value. Let's take a concrete example: you place a buy order at 100 euros with a stop price of 105 euros. This means that if the share price rises above 105 euros, you no longer wish to buy it. In the same way, to protect yourself against a fall in the stock, you can place a stop sale order at 95 euros.

This means that if the share reaches this value, your order will be triggered and executed according to the market price. With this type of order, you can set targets for your shares without having to monitor the values. Be careful when entering it: for a buy order, the specified price must be higher than the quoted price, and vice versa for a sell order.

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