Types of Stock Order – Market, Limit, Short Sell, Bracketed, Day Orders & moreLast Updated Date: Aug 30, 2023
In this article, we will learn about various Types of Stock Order that you can process. So, let us discuss!
Whenever a company issues its shares publicly, anyone can buy it. As soon as you purchase some shares, you technically have the company ownership precisely the number of shares you bought.
Of course, you can later sell all or partial amount of those shares to any other interested party.
So, basically, you are buying and selling company shares, which in technical terms is, in fact, the Stock Trading, and as you are trading them, you are a Stock Trader.
Various Types of Stock Order
Before we jump straight into the types of orders, let us know what Stock Order is briefly. You see, it is an Order to either buy or sell the number of company shares.
Now, today we will discuss 13 such Stock Order types. However, not everyone is for you to place an order. Then again, it is essential to know about the full array of Stock Orders available.
List of Stock Orders
- Market Orders
- Limit Orders
- All-or-None (AON) Orders
- Fill-or-Kill (FOK) Orders
- Immediate-or-Cancel (IOC) Orders
- Stop Limit Orders
- Stop Orders
- Short Sell Orders
- Buy to Cover Orders
- Day Orders
- Good-Till-Cancelled (GTC) Orders
- Trailing Stop Orders
- Bracketed Orders
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Market Orders – Well known Stock Order
The first in our list is the Market Orders, and of course, you can execute them anytime.
The general concept of any Market Order is when one is processed; you are open to whichever the best price is that the stock market is offering.
Remember when you are placing a Market Order, you are technically losing the control to set a price. It means you are asking the stock market to choose the best price for you.
Limit Orders – Types of Stock Orders
While with the Market Orders you were losing the control to the market, with the Limit Orders, you are getting back the full control of the stock’s price you are willing to buy or sell.
So, basically, there can be two situations here – one, you can set the maximum limit of any particular stock while you are buying, and two, you can set the minimum limit of the stock while you are selling.
All-or-None (AON) Orders – Highly used Stock Order
The All-or-None (AON) Orders are custom orders that you can place to avoid any confusion while you are buying several company stocks at the same time.
Generally, if and when you place multiple orders at the same time, there can be some delays to complete the entire order.
What happens next is you may end up paying distinct prices for each accepted segment of the whole order.
So, if you process the All-or-None (AON) Orders, you can avoid that; however, there is a possibility that the order might get failed to process.
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Fill-or-Kill (FOK) Orders – Innovative Stock Order Types
If you don’t have the whole day to check out what is happening in the stock market, and still want to buy or sell shares, we believe you should process a Fill-or-Kill (FOK) Order.
It is a close-ended deal, where it will either accept the entire order in one go, or the entire order will get terminated.
The Fill-or-Kill (FOK) Orders don’t allow partial orders. Either way, you can get to know the outcome of the deal quickly.
Immediate-or-Cancel (IOC) Orders – Types of Stock Order
The Immediate-or-Cancel (IOC) Orders are pretty much the same as FOK orders with one significant difference.
Here, you can get partial order acceptance, which is not valid for a FOK order.
Again, this is for those traders who, for whatever reasons, can’t stay in front of the computer screen, checking stats all day.
So, the order, whether the entire or the partial, will get accepted or get cancelled immediately.
Stop Loss Order – Risk mitigating Stock Order
A Stop Order, which many traders also called the Stop-Loss Orders, is intended to prevent traders to suffer a massive loss.
The idea is to set a limit where, the order will automatically get processed to put a stop to a further loss while trading.
There is a trigger price point where the Stop-Loss Orders gets activated, and when it reaches that specific price-point, the stock market automatically executes the order.
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Stop Limit Orders – Innovative type of Stock Order
One of the bitter situations, almost every stock trader had experienced is when a stock’s price is on the rise, and you are gaining profit, you didn’t sell the shares to make a profit.
Instead, you waited, and the price dropped again. So, you have a choice; you can put a limit to make a decent profit and sell it at the desired price-point.
Similar to the Stop-Loss Orders, there is a trigger point when once reached the order will automatically get executed.
Short Sell Orders – Famous Stock Order Types
Shorting is one of the most risker forms of stock trading, which if you do with precision, you can earn a hefty profit. The concept is to sell some stocks even before you buy them.
In case if it is baffling to you, the stockbroker allows you that option with significant margin money as security. So, the Short Sell Order is actually to process such orders.
Buy to Cover Orders – New Type of Stock Orders
As the name suggested, a Buy to Cover Order is typically a compensation order when you are trying to repay the short sale you have made earlier.
So, this is not an Order that you make in a conventional stock trading scenario.
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Day Orders – Most used Stock Order Types
A Day Order, as the name suggests, is generic stock trading order that expires in a day. Of course, it depends on the stock exchange and its respective trading hours when the day ends.
Now, the way it works is when you place a Day Order with a price, it is only valid till the working hour of that respective stock exchange ends.
So, no carry forward orders will get accepted the next day.
Good-Till-Cancelled (GTC) Orders
A Good-Till-Cancelled (GTC) Order again gives you a total control after you placed an order. There are 3 things that can keep such an order open.
First, it is open till the time the entire order gets complete and processed. Second, you cancel the processed order for whatever reason. Finally, your order exceeds the timeframe that your broker provides, which in this case, is applicable.
Trailing Stop Orders
Arguably one of the most professional ways of placing an order at the same time, securing an accumulative profit is the Trailing Stop Orders.
This is a vast concept with numerous possibilities. However, there is two significant market scenarios that a Trailing Stop Orders can operate – Open Long Position and Open Short Position.
It mainly serves 3 significant factors – it can secure profit margins, it doesn’t limit the profit margins, and you can set a Stop-Loss.
Bracketed Orders – New Type of Stock Orders
It is safe to say that there are some similar traits between a Trailing Stop Order and a Bracket Order.
Both orders do set an upper and a lower limit to accumulate profit or to put a Stop-Loss with a triggered price.
However, the significant difference is with Bracket Orders, as soon as the price is triggered, it gets converted to a Market Order, and gets executed instantly.
Types of Stock Orders – Conclusion
What we can say indefinitely is, you can place various types of orders at the same time.
Now, as we have provided a clear concept of which one should you use, you should get benefited every time you place an order.
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