Stock Trading Order Types

 1. Market Order – place order and expect to trade at the current market price. For immediate execution. No constraints at all.

2. Limit Order – I want this order to be executed at this price or better. Putting some constraints.

3. Short Order – selling shares of a stock you don’t own. You own a margin account which allows you to borrow shares and sell them at market price.  Let’s say you borrow shares and sell them at the current price and save that money in the bank and then you wait for the share price to go down. Now you can buy those shares with the money you had and return to the person from whom you borrowed. So you make the profit from the difference which is basically what is left in your bank.

4. Stop Limit – provides a safety net to limit our losses. Once the stock price reaches a bottom limit you set then when the stock price hit that bottom limit it turns into market order and it will execute.

5. Stop Orders – you can keep an upper threshold for you stock which mean once the stock rises to a particular price you set it turn into a market order and can be executed.

6. IOC - immediate or cancel it. If you can execute it then immediately cancel it.

7. TIF (Time in Force) – so the order sits there until the order is cancelled it.