Types of orders in the stock market

September 26, 2009

Basically there re two types of share transaction exist in the market such as :-
- Buy Orders
- Sell Orders
A person who doesn’t have basic knowledge about the market he will find it very difficult to transact, But once if you understand the concepts, you will find it very easy to transact in stock market.
Buy Orders
Buy orders are the orders to buy the stocks. These are placed when you expect a rise in share prices. Before placing an order you have to make sure that what is the price at which you are going to buy the stock, what is the quantity of shares you need.
Sell Orders
Sell orders are the orders to sell the stocks. If you are finding that the price of a particular stock that you are holding presently will go dawn, you have to place a sell order.
Types of orders :-
- Limit order
- Market Order
- Stop Loss Order

Limit order
A Limit order is an order to buy or sell stocks at a specified price. Use of a Limit order helps to ensure that the customer will not buy/sell the stocks at a price less favorable than the limit price. Use of a Limit order, however, does not guarantee an execution. A limit order should have a Time in Force (TIF) value.
For Example:
· A buy limit order for Unitech at Rs.410 will buy shares of Unitech at Rs.410 or less.
· A sell limit order for Unitech at Rs.410 will sell shares of Unitech at Rs.410 or more.
Market Order
A market order is an order to buy or sell a stock at the price at it is currently available in the market. When you submit a market order, the order can execute at any price that is prevailing in the market. There is no guarantee in the money that you are going to receive.
For Example:
For example if you are placing a buy order for axis bank, the order will be executed at the price that is available in the market.
Stop Loss Order
A stop loss order permits you to place an order which gets activated only when the last traded price of the share is reached or crosses a predefined price. Stop loss price is also called as trigger price. If you feel that any particular share will be worth buy or sell only after it crosses certain price limits then this type of orders are good.
For example:
Buy Tata Motor at Rs 110 with a stop loss of Rs 100, it mean that if the share price falls to Rs 100, the shares will be sold, by limiting your loss to Rs 10.

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