Tuesday, March 24, 2009

Stock definitions

Limit:
A limit order is an order to buy or sell a security at a specific price. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher.

Use it for buy in down trend, sale in up trend.

Stop Limit:
A stop-limit order is an order to buy or sell a stock that combines the features of a stop order and a limit order. Once the stop price is reached, the stop-limit order becomes a limit order to buy or to sell at a specified price.

Use it for buy in up trend, sale in down trend.

http://www.sec.gov/answers/stoplim.htm

Trailing stop:
A stop-loss order set at a percentage level below the market price - for a long position. The trailing stop price is adjusted as the price fluctuates. The trailing stop order can be placed as a trailing stop limit order, or a trailing stop market order.

http://www.investopedia.com/terms/t/trailingstop.asp

Use it for holding stock while limit loss. Good example: http://beginnersinvest.about.com/od/investing101/ss/stocktrading_8.htm

Equity trades:
include stock and ETFs (Exchange Traded Funds).

Option trades: