#OrderTypes101 Common Order Types

1. Market Order

What it is: Buy or sell immediately at the current market price.

Use when: You want to execute quickly without worrying about price.

Pros: Fast execution.

Cons: Price may fluctuate, so you might get a different price than expected.

2. Limit Order

What it is: Buy or sell at a specific price or better.

Use when: You want to control the price you pay or receive.

Pros: Price control.

Cons: Order may not execute if the market never reaches your price.

3. Stop Order (Stop-Loss Order)

What it is: An order to buy or sell once the price reaches a certain "stop" level.

Use when: You want to limit losses or protect profits.

Example: Sell if the price drops below $50 to limit loss.

4. Stop-Limit Order

What it is: When the stop price is reached, a limit order is triggered instead of a market order.

Use when: You want to control the price at which the order is executed after the stop price is hit.

5. Trailing Stop Order

What it is: A stop order that moves with the market price by a set amount or percentage.

Use when: You want to lock in profits while allowing the price to move favorably.