#OrderTypes101 Order types are instructions to buy or sell a financial asset at a specified price or under specific conditions. Here's a breakdown of common order types:
1. Market Order
- *Definition*: Buy or sell an asset at the current market price.
- *Execution*: Immediate execution at the best available price.
2. Limit Order
- *Definition*: Buy or sell an asset at a specified price (limit price) or better.
- *Execution*: Executed only when the market price reaches the limit price.
3. Stop-Loss Order
- *Definition*: Sell an asset when it falls to a specified price (stop price) to limit losses.
- *Execution*: Converted to a market order when the stop price is reached.
4. Stop-Limit Order
- *Definition*: Buy or sell an asset when it reaches a specified price (stop price), with a limit order executed at the limit price.
- *Execution*: Combines the features of stop-loss and limit orders.
5. Take-Profit Order
- *Definition*: Close a position when the asset reaches a specified price (take-profit price) to lock in profits.
- *Execution*: Similar to a limit order, executed when the take-profit price is reached.
6. Trailing Stop Order
- *Definition*: Set a stop-loss order that automatically adjusts to a certain percentage or amount below the market price as the price moves in favor of the trade.
- *Execution*: Trailing stop price adjusts dynamically based on market price movements.
7. Fill-or-Kill (FOK) Order
- *Definition*: Execute the entire order immediately at the specified price, or cancel it if it cannot be filled in full.
- *Execution*: Immediate execution or cancellation.
8. All-or-None (AON) Order
- *Definition*: Execute the entire order at the specified price, or do not execute any part of it.
- *Execution*: Only executed if the entire order can be filled.
9. Immediate-or-Cancel (IOC) Order
- *Definition*: Execute as much of the order as possible immediately at the specified price, and cancel any remaining portion.