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5 Baseline Types of Stock Trading Orders Explained

The types of stock trading generally depend on the type of the stock order. After you have selected a broker, you will probably want to start trading shares and stocks right away. However, the first thing you need to do is to decide on the types of stock trading orders you are going to use. What’s more, you will also need to identify specific circumstances and market conditions at which you will apply different types of stock trading orders.


In this article, we will review 6 baseline order types. Additionally, we will identify the circumstances under which they are supposed to be used.

What Are the Different Types of Stock Trading Orders?

As stated earlier, types of stock trading orders are defined by specific market conditions. They may depend on various factors. To select the best one, it is required to proceed with an in-depth market analysis taking into consideration crucial insights, news, and stock-related events. The list below describes five different types of stock trading orders depending on the investment circumstances.

1. Market Orders

It is the most common and simplest type of order. It says that you are willing to sell or buy a specific number of stocks (shares of a stock) at a given price. In some cases, the prices at which you purchase or sell assets can be a bit different if compared to the initial one. Do not be surprised when you see those slight differences.

2. Limit Orders

These types of stock trading orders make it possible to limit the price at which you are willing to purchase or sell specific stocks. They are used when limiting the asset minimum or maximum price. Limit orders are different from market orders, as at some point there is a chance of the latter order not to be executed.

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Before you place a limit order, you need to take into account 3 main conditions:

  1. There is always a chance for the stock price to never reach the established maximum or minimum limit. It means that a trader may not even have a chance to execute the order.
  2. Price fluctuation can also be the reason for missing the order, as it can move below or above the established limit. It usually happens before you are able to carry out the trade. Luckily, the introduction of online brokerage made it possible to execute trades almost instantly. This is why order execution speed is very important when choosing a platform.
  3. The order can be automatically executed once the asset has reached the limit price when a sudden drop takes place. It leads to unexpected order execution.

3. All-or-None Orders

Also known as AON orders, they help to avoid the situation when a trader pays a different price for the same order that consists of several parts (usually, when you want to buy a big amount of a company's stocks). The order helps you define a single price for the entire transaction. On the other hand, there is a chance of kissing the order in case there are not enough shares for its fulfilment.

4. Immediate or Cancel Orders

You probably heard of them as IOC stock trading orders. The main benefit here is that it helps traders to complete the order when buying only a partial amount of the entire order. This may happen when a company runs out of shares available for the purchase making them unavailable at a limit price or better. When the situation takes place, the rest of the order is cancelled.

5. Stop Orders

Stop orders are usually compared to stop limit orders, as both types refer to stop-loss types of stock trading orders. However, they are quite different. The technique can be used in case you are eager to lock profits. At the same time, these types of orders deliver more flexibility, as they can be easily converted into the market order, once the asset price reaches the predefined value (or the stop price). The good news is that your order will be executed whatever happens. The bad news is that sometimes you will not even know the stock price.

The Bottom Line

We have reviewed only several different types of stock trading orders. Traders can choose from a variety of approaches and tools that make it possible to perform trades in various ways depending on the market situation, their approach, and other important considerations. This is why it is very important to understand how the stock market moves. It will let you choose an order type respectively and quickly react to drastic changes.

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.