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Different Types of Orders Placed in Stock Market
1. MARKET ORDER:
This is most commonly-placed order in markets. And this order is for buying and selling the holdings of investors at the best possible price. The person who wants to buy a stock at a particular price asks the broker to arrange him the same by searching at the lowest available price. The seller asks the broker to look for the highest offer. Both, of course, do not know at what price the stock be finally bought or sold. But the system are configured in such a way that for seller highest prices will appear first and vice versa for buyer. But the price variance may occur while executing the transaction.
2. MARKET PROTECTION ORDER:
At the time of placing an order on the Bombay Stock Exchange, clients/investors can specify the deviation from the current offer/bid price up to which the order can be executed. In simple words the acceptable price variance is specified by the investors at the time of making the order itself. For example, if you enter 5%, it means that the price at which the order will be executed will be limited to plus or minus 2% of the current market price. It won’t be executed if this range is crossed above or below to that specified variance.
3. LIMIT ORDERS:
In this, the buyer states the price limit beyond which he will not buy. The broker can buy only at the specified price or lower. Similarly, the seller specifies a limit below which he will not sell. For example, a purchase limit order for Rs 700 for a specific scrip will work only if there is a seller at Rs 700 or less. As the limit for the price is specified at the time of making the order itself , it is called as Limit order.
4. DAY ORDER:
This order is valid only on the day it is placed because market gets fluctuated every minute and every day extensively.
5. FILL OR KILL ORDER:
It is an order to buy or sell a certain number of shares and is for immediate execution. If it cannot be executed immediately, it is cancelled. It is called as such because if the order is not ful”filled” within the time then it gets automatically “killed”.
6. STOP ORDER:
It is a conditional order which is activated only when the market price of the security reaches or crosses a threshold specified by the investor in the form of Stop Loss Trigger Price or SLTP. When an SLTP is specified, it becomes conditional on the market price of stock crossing the SLTP. If you want to sell your holdings when the market price falls below 1000 then you can set SLTP price as 1000 so that your sale order gets activated after it has reached Rs 1000.
7. DISCLOSED QUANTITY:
This order facilitates disclosure of only a part of the order quantity to the market. For instance, an order of 2000 shares with a disclosed quantity of 200 means the market will know that you are buying just 200 shares. After this, the order for another 200 will be disclosed and so on, till the full order is executed.
8. BASKET ORDERS:
Basket trading helps investors to execute orders in a set of stocks which are either index constituents or part of a basket created by them. In this, multiple stocks can be bought in a single order. If you want to buy the shares of TCS , WIPRO ,INFOSYS ,RIL at a time then you can place a basket order for fulfilling your wish to buy them. If you have any query regarding “Different Types of Orders Placed in Stock Market” then please tell us via below comment box… Recommended Articles
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