#OrderTypes101

Let's break down the three main order types used in trading:

*Order Types*

- *Market Order*: Execute a trade immediately at the next available price. This order type prioritizes speed over price, making it suitable for highly liquid markets during trading hours. However, be aware that prices can change rapidly, and the execution price might differ from the quoted price.

- *Limit Order*: Buy or sell a stock at a specific price or better. This order type gives you control over the execution price but doesn't guarantee a fill. Limit orders are useful when you have a target entry or exit price and are willing to wait for the market to move in your favor.

- *Duration Options*:

- *Day Only*: Active for one trading session

- *Good Till Canceled (GTC)*: Active for up to 180 calendar days

- *Day + Extended Hours*: Active during extended trading sessions for one day

- *GTC + Extended Hours*: Active during extended trading sessions for up to 180 calendar days

- *Stop Order*: Buy or sell a stock when it reaches a specified price (stop price), converting into a market order or limit order. Stop orders can help limit losses or lock in profits.

- *Types of Stop Orders*:

- *Stop-Market Order*: Execute at the next available price after the stop price is reached

- *Stop-Limit Order*: Execute at a specific price or better after the stop price is reached

- *Trailing Stop Order*: Set a dynamic stop price based on a percentage or dollar amount away from the market price

Understanding these order types can help you make informed trading decisions and manage your positions effectively ¹.