Methods of Buying & Selling of Shares

by khalid on 17/09/2011 · 2 comments

The different types of orders used for Buying & Selling of Shares are:

Market Order: A market order is an order to buy or sell a stock immediately at the best available price. The order is executed at the current market rate. In a market order we do not need to mention the price, the shares are executed at the current available price. There is no restriction on the buy or sell price of the stock.

It is meant for those who want to purchase or sell their shares immediately at the current price.

Limit Order: In limit order buying and selling price has to be mentioned. It is reverse from a market order. A limit order is executed only when the share price comes to the rate which is mentioned by the investor. It is not certain that the price will come as per limit order.

In an intra-day trading it is risky to choose limit order as all the transactions need to square off before 3:30 pm. If in case the share prices do not reach the limit order, then the order will remain open and one has to go through heavy penalties.

Stop Loss trigger price: A stop loss order is an automatic trade order set by an investor. It gets executed once the price falls to the stop price as set by the investors. Both Stop Loss & trigger price are used to reduce losses. It is significant for intraday traders which means cut the losses

 

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