Orders In The Stock Market And Its Types
In a stock market, we could have heard the word “order” often because the stock market is nothing but buying and selling stocks and trades. It is really a great place to increase the long-term wealth for the corporate companies and the government. There is a central body which plays a vital role in the capital market to regulate and monitor the price changes. There are usually two activities to do in a market.
Buying is purchasing the orders of stocks, trades or commodities and it is better to buy when the market shows a deflation in the prices. Because when the prices are high, there will be no profitable return for the traders.
Selling is nothing but vending the trades the users have in their hands to the other traders in the market. When the prices get elevated in the marketplace, then it is the best item to sell the trades to yield more incomes.
Types of orders:
There are many types of orders present in the stock market and let us take a look and discuss it in brief below.
- Limit order
- Market order
- Stop loss order
- Stop loss market order
- Stop loss limit order
A limit order is a fixed price order that is the traders already set up a price limit for the stocks and so the buyers cannot buy or sell the stocks less than the limit order prices.
The market order price depends on the recent price changes happening in the market and there is no guarantee for the money the traders can earn, and it is purely based on the inflation and deflation of stock prices in the marketplace and the traders do not know how much money they can yield.
Stop loss order:
Stop loss order is something very useful for the brainy traders because the orders can get activated only when the price of the share reaches the fixed preplanned price and so the businessmen can earn a lot of profits in this type of order.
Stop loss market order:
As the name sounds, it is just the blend of both stop loss and market order. Here the order of selling is considered as market price when the stop loss amount is reached below, and the order of buying will be treated as stop-loss order when the stop loss price is above.
Stop loss limit order:
It is a combination of stop-loss order and the limit order.
Therefore conclude that the above orders are the main source every trader should be aware of before they fall in the trading field.