What Types of Orders are Available to Day Traders?

To optimize day traders’ potential to trade successfully, it’s important to understand some basic terminology and types of orders available. SureTrader clients benefit from multiple order types available to them for their trades and the availability of courteous and knowledgeable support personnel to assist you along the way.

Types of Orders

What Types of Orders are Available to Day Traders?

To optimize day traders’ potential to trade successfully, it’s important to understand some basic terminology and types of orders available. SureTrader clients benefit from multiple order types available to them for their trades and the availability of courteous and knowledgeable support personnel to assist you along the way.

Market Order

Market orders are placed by day traders when they want to purchase a stock and are not extremely particular what the ‘market price’ is at the time the order is executed. Market Orders are the fastest and most guaranteed order execution but not necessarily at the exact price it was at the time of the order. Since prices constantly fluctuate a market order initiated when the stock price was $4.85 may actually be executed at a price of $4.70 or $5.10 depending on the stock’s activity.

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Stock Limit Order

Limit orders are executed by a trader who wants to purchase a particular stock at a certain price (or better), but is willing to accept the possibility that the order may not be executed at all if that price is not reached. Limit Orders are not guaranteed. For example, a day trader may place a limit order for a stock at $12.50, but the price remains above that mark so the order will never be executed. If the value indeed drops to $12.50 or less the buy order will be completed. When placing a Buy Limit Order, the price must be at or below the Bid, on the other hand, when placing a Sell Limit Order the order must be set at or above the Ask.

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Buy and Sell Stop Market Order

Stop orders are similar to market orders from the standpoint that they will be executed at the market price which may vary slightly from the order price. Stop is used to prevent losses and protect profits. The significant difference is that the order is placed with a price that must be met before the order will be executed. A stock with a buy stop order of $22.55 will be executed as soon as the price reaches that point but will be executed at the market price which may be a value somewhat higher (or lower) at the time the order is completed. If that stop price is not reached there will be no order executed.

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Buy and Stop Limit Order

Limit and Market Stops are the most common stop orders. These orders combine attributes of both limit orders and stop orders. As with stop orders they will only be executed if the stock reaches the price designated on the order. The difference is that, like a limit order, it will only be completed if the stock value is equal to or less than the limit factor on the order. To place a Stop Limit, you must insert a trigger/stop price and a limit price on the other hand only a stop price is set to execute a Stop Market.

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Range Stop Order

Range Stops can be set by placing a high and low trigger to capture profits and prevent losses.

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Trailing Stop Order

Trailing Stops are set with defined with a dollar or percentage amount and is triggered and executed once the stock moves against you by this amount. The stop price readjusts when the stock advances in your favor but does not move when it moves against you. This stop is typically used to close a trade once the stock price is moving the opposite direction of a trade.

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Trigger Order

Trigger Orders place orders automatically based on another order being executed. With a Trigger Order, you can enter an initial order for a stock, or option, and simultaneously place a second order that is contingent upon the fill of the first order. This is a great feature that allows traders to setup an entire trade plan from start to finish, helping to automate your trading strategy. This trading feature is available on our SureTrader Pro Platform.

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One-Cancels-The-Other

One-cancels-the-other order (OCO) combines two orders (a stop order and limit order) in one. When either the stop or limit level is reached and the order executed, the other order will be automatically cancelled. This trading feature is available on our SureTrader Pro Platform.

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