Different Types of Orders in Stock Market based on price

Orders can be classified as following based on price conditions. These are the most common type of orders in a stock market.

Market Order:  In a market order there is no price specified for the order to be executed. It’s always matched against going market price. For buy orders the price is matched against the top quote on offer side and for a sell order the price is matched against the top quote on bid side. In an order book bid rates are arranged in descending order and offer rates are arranged in ascending order.

Limit Order: In a limit order price at which the order should be executed is mentioned. Usually for a buy order it is specified as ‘less than or equal to a particular price’ and for a sell order it is specified as ‘greater than or equal to a particular price’.

If a buy limit order is placed at a price greater than market price then it gets converted to market order and executed immediately as for that price the there would always be sellers. Similarly when a sell limit order is placed at a price less than the market price then also it gets converted to a market order and there will be fairly good number of chances that it gets executed.

Stop Loss: A customer (investor/trader) can put an order in such a way that the order should be released only when the market price reaches a threshold price (known as trigger price). In a stop loss order the customer has to enter a trigger price, limit price and quantity along with the security code and type. Read more

July 27, 2008 | Filed Under Stocks | Leave a Comment 

Different Types of Orders in Stock Market based on quantity

Orders can be classified as following based on quantity conditions.

Disclosed Quantity (DQ):  DQ order allows a buyer/seller to disclose only a portion of the total quantity they want to buy/sell to the market. For example, if the total quantity is 50,000 and disclosed quantity is 10,000 then only 10,000 is disclosed to the market. Once this quantity gets executed then another 10,000 will be disclosed. DQ order is to stop fluctuations in the market price because of a large quantity order.

Fill-or-kill:  In a fill-or-kill order the total quantity of order should be executed immediately and fully. Partial order execution is not allowed. If the order doesn’t match an opposite order for the full quantity mentioned the order will be cancelled.

All-or-None: It is similar to fill-or-kill order but in all-or-none there is a time constraint (for example, a day). It need not be executed immediately.

 

July 27, 2008 | Filed Under Stocks | Leave a Comment 

Different Types of Orders in Stock Market based on time

Orders can be classified as following based on time conditions.

Immediate or Cancel (IOC): In an IOC order, as the name suggests, a counter order with the matching price should be available immediately other wise the order will be cancelled. Quantity doesn’t need to be matched i.e. partial matches are allowed but the unmatched quantity will be cancelled. For example, if an order is placed for 10000 shares and if the order is matched only for 5000, then only 5000 shares are traded and the order for the other 5000 shares will be cancelled.

Good-till-date: In good-till-date order the orders stay open till a defined date. Orders are cancelled if they are not executed by that date.

Good-till-cancelled: As the name suggests this order is valid until they are cancelled by the customers, if not executed.

It should be noted that the acceptance of different types of orders varies from exchange to exchange and may depend upon the broker.

July 27, 2008 | Filed Under Stocks | Leave a Comment 

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