What are the different order types I can place?
On Stake, we offer three types of orders:
- Limit (GTC or EOD)
- Stop Orders
A limit order is an order to buy or sell a whole number of shares at a specific price or better.
A buy limit order can only be executed at the limit price or lower. A sell limit order can only be executed at the limit price or higher. Meaning a limit order is not guaranteed to execute.
With limit orders, you have the ability to choose when the order will expire; End of Day (EOD) or Good-Til-Cancelled (GTC). EOD limit orders will expire at the end of the day, as the name suggests, while GTC orders are valid from 30 days from placement. This means the order will remain pending in the market until it's either filled or expires.
A market order is an order to buy or sell a share at the next best price. Generally, this type of order will be executed immediately. Unlike limit orders, the price at which a market order is executed is not guaranteed.
A market order on Stake can be placed at any time, but will only be executed when the market is open.A stop order is a buy or sell order that is triggered once the price of a stock hits the set stop price. At this point, the order is converted to a market order for the next best price of the stock in the market.
A buy stop order is entered at a stop price above the current market price, while a sell stop is entered at a stop price below the current market price.Stop orders can be used to limit losses or lock in profits when prices of a stock begin fluctuating.
Considerations for Stop Orders
- All stop orders remain queued for 90 days until they are executed or called by yourself. This means they do not expire at the end of the day (like limit orders do).
- The stop price needs to be $0.05 cents below (for sells) and above (for buy stops) the current market bid or offer respectively.
- Unlike limit orders, Stop orders do not guarantee the price of buy/sell. In volatile conditions, the executed market order may be significantly different to the set stop price. You'll receive the next best available price, which could be notably higher/lower.
Example of a Stop Sell Order:
John has some TSLA shares he’d like to sell if the price drops below $700. He places a Stop Sell order on Sunday for $700. The stock continues trading above $700 until Friday's trading session, where it drops to $700. A market order is immediately triggered and the shares are sold. John exits the position at $699.99, the next best available price.
Example of a Stop Sell Order in volatile conditions:
John has some TSLA shares he’d like to sell if the price drops below $700. John sets his stop-sell price at $700. TSLA releases disappointing corporate news, which results in the stock plummeting. John’s stop-sell triggers as the price was falling rapidly. John exits the position at $620, the next best available price.