#OrderTypes101 : What is a Market Order?

Intro:

A market order is the most basic type of order in trading. It tells your broker to buy or sell an asset immediately at the best available price.

Key Points:

Speed over price: You get filled quickly, but not necessarily at the exact price you saw.

Best for liquid assets: Works well when there's lots of trading volume (e.g., large stocks like Apple).

Risks: In volatile markets, the price can move before your order is filled—called slippage.

Example:

You want to buy shares of Company XYZ, currently trading at $100. You place a market order, and it gets filled at $100.05 due to slight price movement.

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2. OrderTypes101: Mastering Limit Orders

Intro:

A limit order gives you control over the price. You specify the exact price you’re willing to buy or sell at—and the trade only happens if that price is met.

Buy Limit Example:

You want to buy ABC stock, but only if it drops to $50. You place a buy limit order at $50. If the stock hits that level, your order may fill.

Sell Limit Example:

You own shares at $45 and want to sell if it reaches $55. Place a sell limit at $55.

Pros:

No overpaying or underselling.

Avoids slippage.

Cons:

No guarantee the order will be filled.

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3. OrderTypes101: What is a Stop-Loss Order?

Intro:

A stop-loss is like a safety net. It triggers a market order when a stock hits a certain price—helping you cut losses automatically.

Example:

You bought stock at $100. You set a stop-loss at $90. If the stock drops to $90, it sells—protecting you from deeper losses.

Key Benefit:

Helps manage risk without constant monitoring.

Drawback:

Can trigger during short-term dips, selling you out too soon.

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4. OrderTypes101: Stop-Limit Orders Explained

Intro:

A stop-limit order combines a stop-loss with a limit order. It adds more precision but also complexity.

How it works:

Stop price: Triggers the order.

Limit price: Sets the worst acceptable price.