#OrderTypes101 Let's break down the different types of orders:
1. Market Order
- *Definition*: A market order is an instruction to buy or sell a security at the current market price.
- *Key Feature*: Executed immediately at the best available price.
2. Limit Order
- *Definition*: A limit order is an instruction to buy or sell a security at a specific price or better.
- *Key Feature*: Only executed if the market price reaches the specified limit price.
3. Stop-Loss Order
- *Definition*: A stop-loss order is an instruction to sell a security when it falls to a certain price, limiting potential losses.
- *Key Feature*: Helps manage risk by automatically selling a security when it reaches a predetermined price.
4. Stop-Limit Order
- *Definition*: A stop-limit order is a combination of a stop-loss order and a limit order.
- *Key Feature*: When the stop price is reached, the order becomes a limit order, which is executed at the specified limit price or better.
5. Take-Profit Order
- *Definition*: A take-profit order is an instruction to sell a security when it reaches a certain price, locking in profits.
- *Key Feature*: Helps manage profits by automatically selling a security when it reaches a predetermined price.
6. Trailing Stop Order
- *Definition*: A trailing stop order is an instruction to sell a security when it falls by a certain percentage or amount from its recent peak.
- *Key Feature*: Helps manage risk by automatically adjusting the stop price as the market price moves in favor of the trade.
7. Fill or Kill (FOK) Order
- *Definition*: A FOK order is an instruction to execute a trade immediately and completely, or cancel it entirely.
- *Key Feature*: Ensures that the entire order is filled at once, or not at all.
8. All or None (AON) Order
- *Definition*: An AON order is an instruction to execute a trade only if the entire quantity can be filled.
- *Key Feature*: Ensures that the entire order is filled, or not at all, but can remain active until filled.