An order instructs your broker exactly how, when, and at what price to buy or sell securities on your behalf. Unlike online retail purchases, where you simply pay the listed price and then wait to receive your order, with financial orders, you dictate the exact terms under which you're willing to trade. If the markets are open, you could see the results right away.

Understanding the different types of orders isn't just about knowing how to work your broker's platform, but about strategically choosing the best way to buy something you want in the markets. Below, we take you through the range of orders you'll find on most investing platforms, along with the aims and strategies for using each.

What Is an Order?

A fundamental aspect of financial markets is that, unlike retail shopping, where prices are fixed on price tags, there must be both a buyer and a seller who agree on what's called their bid and ask prices for 💛any transaction to go through. This constant negotiating is why you see🧸 undulating price charts in any coverage of the financial markets, even though much of this is invisible to you when inputting your first orders.

Below are the order types:

Market Order

Typically your default option in a brokerage app, a 澳洲幸运5官方开奖结果体彩网:market order tells your broker to immediately execute your trade at the best available 🎉price. The advantage is certainty of execution—your order will almost always be completed.

The potential downside is "slippage," where the price changes between when you submit the order and when it executes. While this is minimal if you're looking to buy a major stock like Apple Inc. (AAPL) when the stock markets are open, this price difference can add up for those who trade often.

Example: You've been researching Apple's stock for weeks and have decided to invest. You place a market order to buy shares, prioritizing the certainty of owning them today, despite some minor slight price change during the time the order gets executed.

Limit Order

A 澳洲幸运5官方开奖结果体彩网:limit order gives you price control by specifying the maximum you're willing to pay (for buying) or the minimum you'll accept (for selling). It's like leaving a firm offer for a used car: you'll only buy if the seller c𒀰omes down to a certain price.

The benefit is price certainty—you'll never pay more (or receive less) than your limit price.

Example: You're interested in buying shares of Microsoft Corporation (MSFT), but your research says the current price of $385 is too high. You place a l💙imit order to buy at $370, so you only buy shares if the stock drops to that price or lower.

Stop-Loss Order

A 澳洲幸运5官方开奖结果体彩网:stop-loss order (sometimes called a stop order) becomes a market order once a security reaches a price you specify. This helps limit your losses or lock in profits without constantly monitoring the market.

In the chart below, we provide an illustration of two uses of the stop-loss order (use the two buttons to see the difference): one that's called a "澳洲幸运5官方开奖结果体彩网:take-profit order," which acts in the same way as the stop-loss order, but to lock in profits if the stockไ goes up after෴ you buy it—in case it starts coming back down.

Example: You bought NVIDIA Corp. (NVDA) at 𒈔$100 per share, and it's now trading at $110. To protect your profits if the market turns, you place a stop order at $105. If the stock falls to that level, your shares will automatically be sold.

Stop-Limit Order

澳洲幸运5官方开奖结果体彩网:Stop-limit orders co🍰mbine features of both stop and limit orders. You set two prices: a stop price that activates the order and a limit price that sets your minimu🍨m acceptable price.

This order type is often used in a volatile market when pricesꦿ mig🤪ht fall so fast that a regular stop order might execute too late, like applying the brakes early on a slippery road to ensure you stop in time (by analogy, get your price).

The risk is that if the price falls below your limit before your order executes, your broker won't sell until the price rises back to your limit—if it ever does.

Example: You bought Amazon.com Inc. (AMZN) at $170 and now it's trading at $180. You set a stop-limit order with a stop price of $175 and a limit of $173. If Amazon falls to $175, your order activates, but it will only be executed if the price remains at or above $173.

Trailing Stop Order

Rather than setting a fixed stop price, a trailing stop moves with the market price when it's in your favor. You can set it as a percentage or a dollar amount above or below the current price.

Trailing stops are particularly useful for protecting profits when the price is trending up, giving your investments room to grow.

Example: You bought stock in Tesla, Inc. (TSLA) at $240, and you set a 10% trailing stop. If Tesla rises to $300, your trailing stop price automatically adjusts to $270 (10% below $300). Should Tesla then drop to $270, your shares would be sold, locking in most of your gains.

Determining How Long Your Order Is Active

You can also control how long your order will stay active.𒁏 Here are the standard options:

• 澳洲幸运5官方开奖结果体彩网:Day orders (the default): Your order expires at the end of the trading day if not filled. This is the standard setting on most platforms—if you don't select anything else, your order disappears when the market closes that day.
• 澳洲幸运5官方开奖结果体彩网:Good-'til-canceled: Your order stays active until either it's filled or you manually cancel it. Most brokerages limit how long these can remain open, typically 30 to 90 days. Use this when you're patient about getting your desired price and don't want to re-enter the order every day.
• 澳洲幸运5官方开奖结果体彩网:Immediate-or-cancel: This tells your broker to fill as much of your order as possible right now, and cancel any unfilled portion immediately after.
• 澳洲幸运5官方开奖结果体彩网:All-or-none: Specifies that you only want the trade to happen if your entire order can be filled. These are helpful when a partially filled order won't work for your strategy.
• 澳洲幸运5官方开奖结果体彩网:Fill-or-kill: Your entire order must be filled immediately, or the whole thing is canceled. This is for when you need both speed and a guaranteed complete fill.

How Your Orders are Processed

When you click "Buy" or "Sell" in your investment app, your order doesn't go to a physical trading floor—no one's rushing to a trading floor flashing a paper with your trade.

Your broker has seve🥂ral ways to fill your order:

• It might match your order with another customer's opposite order within its own system.
• It could send your order to multiple competing marketplaces simultaneously, including stock exchanges, specialized trading firms called 澳洲幸运5官方开奖结果体彩网:market makers, and electronic networks that connect buyers and sellers.

What matters most to you as an investor is that brokerages must follow "best execution" rules by law—your broker must get you the lowest available price in the market at that moment. Sometimes they'll even fill your order from multiple sources to get you the best overall price.

Many brokers also advertise that they often beat the national best prices (known as the NBBO), potentially saving you money on each trade.

Human Traders

Human traders are used for large or complex orders, options trading in some markets, exchanging foreign currencies among banks, and massive bond trades. As an individual investor making typical trades, your orders will almost always be handled electronically.

The Bottom Line

When you place an order on your broker's platform, you have control over both the price you're willing to accept and how long your order stays active. Your broker acts as your ♛represent🐓ative in the marketplace, connecting you with exchanges and other trading venues.

While you decide what and when to buy or sell, you enter the type of order that suits your strategy, and your broker chooses the best way to execute your trade. Understanding t💝hese order types gives you the🦋 tools to trade according to your own strategy and timeline.