#OrderTypes101

Understanding orders in trading is essential for grasping how to buy and sell financial assets. Here’s a quick summary of the most common types:

1. Market Order

A market order is a request to buy or sell an asset immediately at the best available price. It is the fastest to execute, but you do not control the exact price you will get, especially in fast-moving markets.

2. Limit Order

A limit order is a request to buy or sell an asset at a specified price or better.

* A buy limit order is placed at a price lower than the current market price and will only be executed if the price falls to that level or lower.

* A sell limit order is placed at a price higher than the current market price and will only be executed if the price rises to that level or higher.

This type gives you greater control over the price, but there is no guarantee that the order will be executed if the market does not reach your specified price.

3. Stop Order / Stop-Loss Order

A stop order, often called a stop-loss order, is an order to buy or sell an asset once its price reaches a specified "stop price."

* For a sell stop order, when the price falls to the stop price or lower, a market order to sell is triggered. This is usually used to limit potential losses in a long position.

* For a buy stop order, when the price rises to the stop price, it is activated.