Buy and Sell Broker Orders

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Buy and Sell Broker Orders

When you are ready to buy (or sell) a stock, you place an order with your broker. An order gives your broker the signal to buy or sell a particular security. You can give your broker additional instructions:

Things To Know

  • Different types of orders are designed for different trading situations.

Limit order

With this order, you instruct your broker to buy or sell a stock at a specific price (or better). You use a limit order when the stock you are interested in is changing in price. This prevents the broker from buying too high, or selling too low.

Stop-loss order

With this order, you instruct your broker to sell a stock if it falls below a specified price. You would do this to prevent further loss. You use a stop-loss order if you are concerned that a stock you own will fall in price.

Good ’til canceled (GTC) or day order

When placing a limit order or stop-loss order, your broker will ask whether you want it to be "good until it is canceled" or "canceled after the close of business." This allows you to control when the order will be executed or canceled.

A broker must execute your orders in a timely fashion. The special instructions give you more flexibility in how you manage your trading account.