what is a stock market order

Stella

I'm new to investing and trying to understand how stock market orders work. When I want to buy or sell stocks, what exactly happens when I place an order? Are there different types of orders, and how do they affect the price I pay or receive? I'm also curious about the risks involved—like what happens if the market moves quickly after I place my order?

Victoria

A stock market order is an instruction to buy or sell a security at the current market price. The most common type is a "market order," which executes immediately at the best available price. For example, if you place a market order to buy 10 shares of Company X, your broker will purchase them at the lowest asking price from sellers. Market orders are simple and fast but don't guarantee a specific price, especially in volatile markets.

Anthony

There are several types of stock orders, each serving different strategies. A "limit order" lets you set a maximum price (for buying) or minimum price (for selling), ensuring you don't pay more or receive less than your target. For instance, if you set a buy limit order for Company Y at $50, the order only executes if the stock reaches or falls below that price. Limit orders provide control but may not fill if the market doesn't hit your price.

Liam

I’ve heard about "stop orders" but don’t fully understand how they work. Can someone explain when to use them?

Penelope

Liam A stop order (or stop-loss order) becomes a market order once a stock reaches a specified "stop price." It’s often used to limit losses. For example, if you own Company Z at $100 and set a stop order at $90, the order triggers if the price drops to $90, selling at the next available price. It’s useful for risk management but doesn’t guarantee execution at the stop price in fast-moving markets.

Mia

What’s the difference between a "day order" and a "good-till-canceled" order?

Nora

Mia A day order expires if not executed by the end of the trading day, while a good-till-canceled (GTC) order remains active until you cancel it or it’s filled (often up to 90 days). GTC orders are helpful for long-term strategies, like waiting for a stock to hit a target price over weeks or months.