Price Orders
An order represents the intent to buy or sell. Here are some of the primary price orders defined and recognized by the markets:
Market Orders
Market orders are the most common and easiest orders to place. When an investor places a market order, he or she is requesting that the stock be bought at the best available price. Thus, no specific price is specified, but it is assumed that a seller will get the highest bid, and a buyer will get the lowest offer at the time that the order is executed. The order ticket for a market order will include the abbreviation MKT. Market orders are typically filled immediately. A market order may be filled, however, at a different price than originally expected. This is particularly likely when the difference between the quoted prices for bids and offers is large. For this reason, market orders may not always be the best order for an investor. Market orders can be divided and filled by different market participants. This may result in different prices for different shares.
Not Held Market Orders are orders in which traders hold the order until they believe they can get the best price. A not held market order is also called a discretionary order or a working order.
Limit Orders
There are two types of Limit Orders. The Buy Limit Order states a maximum price that an investor is willing to buy a specific security. The buy limit order will execute if the stock can be bought at the specified price or better (lower). The Sell Limit Order states the minimum price at which the investor is willing to sell a specific security. The Sell limit order will execute if the stock can be sold at the specified price or better (higher).
Limit orders will be executed on the floor by price first, and if multiple orders have the same limit price, the competing orders will be ordered by the