"Change Order" and "Cancel Order" options are also available on this page.
The type of order you place can greatly affect the price at which the order is executed. By default, orders will be executed as "market" orders. However other options are available including the following:
Market Orders are orders to buy or sell a stock at the best inside price. In a fast market condition where the price may be fluctuating quickly, a market order can be very risky.
Limit Orders are orders to buy or sell a stock only at the specified price (the limit price) or better. By using a limit order, a buyer can be assured that the market fluctuation will not cause a purchase at a price higher than desired. Similarly, a seller is assured that an execution on the stock will be at the minimum ask price or higher. However, a limit order does not guarantee that the market condition will ever be met to cause the buy or sell to occur.
Stop Market Orders are orders to buy or sell a stock when the price reaches or passes a specified point (the stop price). When the specified price is reached, a stop order automatically becomes a market order and is executed at the best price available. In fast markets, after a stop order hits the stop price and becomes a market order, it can keep climbing or drop sharply and ultimately is executed much higher or lower than originally specified or wanted.
Stop Limit Orders restrict an order so that it executes only at a specific price or narrow price range or at a better price. Unlike a stop order, if the order cannot be executed once the stop price is reached, the order is held until the stated price or better is reached again.
Caution: Stop orders revert to market orders once the stop price has been reached. In volatile markets, while a stop order instructs that the order is sent after a specific price is reached, it does not specify that the order NOT execute if the price moves opposite the desired direction after being initiated but before being executed.
NASDAQ does not permit Stop Market and Stop Limit orders. However, the platform supports the stops internally. See Order Execution Policies for more information.
You are holding XYZ stock currently at $22.50. To protect yourself from downside risk, you enter a Stop Price of $22 and a Limit Price of $21.50. With this arrangement, if the stock falls below $22, the stock will be sold, if possible, at a price no lower than $21.50. However, if because of high volatility the stock falls below the $21.50 limit price, you will retain your position and the order will remain open as a standard limit order until it has expired.
The Limit Price must always be less than or equal to the Stop Price.
XYZ stock has been varying between a high ($9.98) and low ($8.75) price consistently and you wish to purchase the stock only if it breaks out of the pattern and moves higher. You set the Stop Price at $10.00 and the Limit Price at $10.05. If the stock breaks above $10.00, the stop is triggered and the stock will be purchased, if possible, at a price no greater than $10.05. However, if because of high volatility the stock continues above $10.05 before your receive your execution, the order will remain open as a standard limit order until it has expired.
The Limit Price must always be greater than or equal to the Stop Price on a buy stop order.