To save on commissions, investors are gravitating towards online stockbrokers. To avoid confusion and getting stock orders filled at unattractive prices, there are basics that the aspiring stock investor needs to know. For certain types of trades, certain orders are required.

Market Order

A market order tells your broker to buy or sell the stock immediately at the current market price. This type of order is the fastest way of getting the order filled. During moments of trading volatility, the actual price filled could be much different from the last price traded.

Day Order

A day order is only valid for that specific day. If the order is not filled by the end of the trading day, the order is cancelled.

Good Till Canceled

A good till canceled order tells your stockbroker to keep the order active until you cancel it.

All or None

The all or none order informs your broker that the entire order is to be filled or none at all. This order is used for thinly traded stocks.

Limit Order

A limit order informs your stockbroker at what specific price to buy or sell the stock. The order will not be filled until it can be done at the specified price. The limit order gives you control at exactly what price you want the order filled.

Stop Loss Order

A stop loss order is done to protect you from a further price drop of a stock. It is used to minimize your losses or protect your profit. The price of a stop loss order is entered below the current market price. If the stock falls to the price point, the stop loss order becomes a market order and your stockbroker sells the stock. As long as the stock stays above the stop loss price order, nothing is done.

Trailing Stop Loss

The trailing stop loss order is used to protect profit on a stock. As the stock price continues to climb, the limit selling prices moves up in tandem. This move protects further gains in the stock. The trailing stop loss works like a stop loss order.

Conclusion

The stock market orders listed here are the most common ones used. To avoid any potential misunderstandings or errors with your stockbroker, keep records of all orders put through and those that have been filled. If there are any disputes about price or specific trading instructions, the documents can be used as reference.