TYPES OF ORDERS IN STOCK MARKET | பங்குச் சந்தையில் ஆர்டர்களின் வகைகள்

 

TYPES OF ORDERS IN THE STOCK MARKET

Generally, there are four important types of orders are there, they are:

1. Market Orders
2. Limit Orders
3. Stop-Loss Orders
4. After Market Orders

Let us see about all these orders in detail.

MARKET ORDERS:

It is the simplest order. Buying security at the best market price is known as a market order. It means once the order for buy/sell is placed, the order will be executed for the best price available in the market. Basically, these orders are executed immediately.

Example: If you want to buy 5 shares of Infosys, and you place an order for that, your order will be executed at the current lowest bid price in the order book. If you place a sell order, it will be executed for the current highest bid price.

LIMIT ORDERS:

In Market orders, we don't have any control over the price, as it is executed at the best market price. But in the case of a Limit order, One can set a limit of price to buy/sell a stock.

Example:  Let us consider the current share price of SAIL as ₹101 and it is fluctuating in the range from ₹99 to ₹102 due to high volatility. Now you are willing to buy the share only when the share price of SAIL becomes ₹99. In this case, you can place a Limit order at ₹99. So, your buy order will be executed only when the share price reaches ₹99 or below.

Suppose if you want to sell the same stock at ₹102, you can place a Limit order at ₹102, So, your sell order will be executed only when the share price reaches ₹102 or above.

STOP-LOSS ORDERS:

This order is like a lifesaver for many traders. In this order, traders can limit their losses by exiting from the trade if a specific price is reached. It is useful from incurring high losses if the price goes against them.

Example: If you place a buy order at ₹50, and you are expecting the price to go high in order to earn profit. But instead of price rising, the share price declined to ₹40. To avoid high losses at that time, you can place a stop-loss order at ₹40 and you will book a loss of ₹10 per share and exit from the trade.

Similarly for the sell order, if the price of the stock rather increases than decreases you can place a stop-loss order.

AFTERMARKET ORDERS:

These are the orders which are placed after the market hours (i.e. after 3:30 PM ). We cannot place orders anytime after the market closes. Different brokers have different times for this kind of order.

There are many conditions on the price of the security you can set in limit order after market hours. normally it is in the range of 5-10% of the adjusted closing price. 

Normally, Generally, the public is not welcome to place these orders.

DISCLAIMER:-

The content of this site is only for educational purpose. I am not SEBI Registered. The motive of this site is to share my knowledge on share market to new budding investors and others who are learning about stock market

My Kind request to my site viewers, Before taking any decision please do self analysis, consult or discuss with Your financial Advisor .

மறுப்பு:-

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