Types of Orders
The Fool FAQ
I'm thoroughly confused by all these types of orders I keep hearing about. Stop orders, stop-limit orders, and on and on. Help!
All or None (AON):
A limit order either to buy or to sell a security, in which the broker is directed to attempt to fill the entire amount of the order or none of it. An all-or-none order differs from a fill-or-kill order in that, with an all-or-none order, immediate execution is not required.
An order which terminates automatically at the end of the business day, if it has not been filled.
An order that is sent to the floor for immediate execution. If it cannot be filled immediately, it is automatically cancelled.
GTC (Good Til Cancelled):
An order either to buy or to sell a security which remains in effect until it is cancelled by the customer or until it is executed by the broker.
An order to execute a transaction only at a specified price (the limit) or better. A limit order to buy would be at the limit or lower and a limit order to sell would be at the limit or higher. Limit orders are used by investors who have decided on the price at which they are willing to trade.
A customer order for immediate execution at the best price available when the order reaches the marketplace. This, the most common type of order, has the advantage of nearly always being filled, since no price is specified.
A market order that trades after a certain level, which you specify, has been reached. It may be time-limited as well, as with a Day Order or Good-Till-Cancelled Order. A stop order guarantees execution but not price.
Stop Limit Order:
A specialized order in which a limit order and a stop order are combined. Once the specified stop price has been reached or exceeded, the stop-limit order becomes a limit order. A stop-limit order differs from a stop order, which becomes a market order when the stop price has been reached or exceeded. A stop-limit order to buy must have a stop-limit price above the market price; conversely, a stop-limit order to sell must have a stop-limit price below the security's market price. In response to a stop-limit order specifying "sell 100 GY 70 stop limit," once the stock sells at or below $70, the order becomes a limit order to sell 100 shares at a price of $70. A variation of the stop-limit order specifies a limit price lower than the stop price.