Generally, investors have two-time frames they can choose from for the execution of their trade order. End of day orders offer a specified time frame and must be filled by the end of the trading day. Good ‘til canceled orders remain open indefinitely unless canceled by the investor. Both of these orders offer the full range of trade options to the investor. With either an end of day order or good ‘til canceled order, investors can choose from the following options:
- Market order: A market order does not have a specified price. This order can be placed at the market’s current rate for a specified security. These types of orders are typically executed within minutes during normal trading hours.
- Limit order: Limit orders are primarily used when buying a security below its market price or selling a security above its market price. These orders will set a specified price to buy that is below the current market price or a specified price to sell that is above the current market price.
- Stop order: Stop orders are primarily used to mitigate substantial losses on a security. A stop loss order is an order to sell that is initiated with a specified price that is below the market’s current price.