For effective dealing in markets, resort to order placement is very important. For this, one should be familiar with different types of orders prevailing in different markets.
This post, tries to capture some basic details of various orders dealt with in the market place.
A market order is one to be executed at whatever the market price is prevailing when the order is entered
A limit order places a limit on the price at which it is to be executed. A buy order sets the highest price. A sell order sets the lowest price.
A stop order is a memorandum order that becomes a market order when the price on the order is reached or passed
Stop limit order
A stop limit order becomes a limit order when the stop price is reached or passed
Fill or kill order
FOK order is an order that must be executed in its entirety immediately or it is to be cancelled
Immediate or cancel order
IOC order is an order similar to FOK order with the difference being that it will accept partial fill and the remaining portion will be cancelled
All or none order
AON order is an order to be executed in full within a specific period of time or it is to be cancelled
At the opening order
ATOO order is to be entered before the market opens and to execute at the opening price or cancel the order
On the close order
OTCO are orders to be executed at the last trade of the day
A spread order contains the instructions to buy one security and simultaneously sell the same but with slight different terms
SOs are used in option trade and involve simultaneous purchase or sale of both a put and a call option with the same underlying with all other details of the contract being the same
One cancels the other order
OCO order has two possible executions. The first order to get executed will automatically cancels the other.
When a trader is trying to make a market for a block of stock that a client is trying to purchase or sell, the trader may enter a facilitation order into the market to offset some of the exposure risk
In addition to the above list, we have Hedge Orders also. We will look into this order in greater detail in our subsequent post.