- Relative strength index (RSI)
- Understanding Candlesticks
- Important Chart Types
- Support and resistance
- Types of Trends
- Bollinger Bands
- Qualities of a super trader
- Risk Management
- Moving averages
- Volume indicator
- Breakouts & Breakdowns
- Identifying trends
- Supertrend indicator
- Contingent liabilities
- Volume, realisation, and revenues explained
- Understanding debt
- Exceptional Items
- PE Ratio
- Outstanding Share Capital
- Book value
- Share Buyback
- Stock Splits
- Understanding Rights Issue
- Bonus Shares
- Technical Analysis
- Various types of Market Participants
- The Basics of Stock Market Analysis
- What is Sensex and Nifty?
- What Is The Stock Market?
- Basics of Investment
- Asset Allocation
- How to Analyze a Balance Sheet?
- Industry Analysis
- Ratio Analysis
- What is share market?
- Stock market guide for beginners
- Share market investment tips
- How does the stock market work?
- What is NSE and BSE?
- Benefits of equity investment
- What are the types of share trading orders?
- What is a circuit breaker?
- Risk management while investing in the share market
- What is an IPO in the share market?
- Show all articles
What are the types of share trading orders?
Have we covered share trading before? In great detail, actually. Shares are known by different names, like equity or stocks. They are a section of a company’s capital which is divided among people who gain or lose according to the portion of capital they hold. A share market or a stock market is an aggregation of buyers and sellers of shares. In the share market, there is a term we call ‘trading order.’
- A trading order is an instruction by a broker, or to the exchange via direct market access - on buying or selling a stock.
- A Market Order is a pretty standard trading order type. It instructs the broker to buy and sell the share at the best price possible.
- Limit Orders is another very popular order type. It allows you to buy or sell at a specific price.
What are Trading Orders?
A trading order is an instruction by a broker, or to the exchange via direct market access - on buying or selling a stock. The orders maybe quite simple or complicated. Every trade consists of at least two orders - to buy and to sell, that is, to enter and exit the trade. In the initial stages, trading may seem quite simple. Push the ‘buy’ button to enter and the ‘sell’ button to exit, but this kind of trading is quite risky and inefficient. The stock market provides numerous trading orders which traders can (and should) use in multiple combinations to trade.
Placing Orders on Trading Platforms
Plenty of different types of trading orders exist on trading platforms, so it is important to have a comprehensive understanding about all of them for a successful trade. But even post understanding them, you need to actually go ahead and place these orders. For placing a buy order, you need to follow the following steps:
- Log on to your Upstox account. Enter your login details and head over to your watchlist.
- Tap on the In the buy section, and choose the exchange. There are two exchanges in India - NSE and BSE.
- Enter the number of shares you wish to buy in the ‘Qty’ box.
- The ‘Order Type’ section provides the list of different orders that can be placed. Choose the one you wish to place.
This is how one can place an order. Similar steps are followed while placing a ‘Sell’ order.
Different Types of Stock Trading Orders
There are multiple stock trading orders that a trader can use to place different trades.
Market Order: is a pretty standard trading order type. It instructs the broker to buy and sell the share at the best price possible. As long as there are buyers and sellers, market orders are always full. It might not be very suitable for a fast moving market, and the price it is executed on may differ from the one your stock was at when you were placing the order. But it can be used when it is important for the trader to get in or out of the trade quickly.
- Limit Order: is another very popular order type. It allows you to buy or sell at a specific price. A buy order can be executed at that price or a lower price and a sell order is executed at that price or a higher price. In a limit order, the trader needs to specify this price. A limit order prevents slippage but there is no filling guarantee.
- Stop Order: (or a stop-loss order, as it is commonly called) is like a market order, the difference being that it is only processed when the stock reaches a price specified by the trader. If it does not reach that price, it is not processed and if stock reaches that price or higher, the stop order is processed like a market order.
- Conditional Order: are complex orders in which more than one condition is specified. They are only processed if all the conditions are fulfilled.
Do Different Stock Trading Orders Cost Differently?
We know that there are different trading orders available and all of them contain a different set of conditions. Orders are processed only when these conditions are fulfilled. The conditions can be quite simple or pretty complex. This makes it valid enough to price different orders differently. Limit orders are more complex as compared to market orders and thereby they increase the work of the broker, which means they will obviously charge higher fees for limit orders.
- Trading orders are a set of rules which determine how a trade will occur.
- There are different types of orders available. A trader can use a single order or a combination of different orders while trading.
- The trading order can be quite simple or complex according to the conditions it fulfills. This also results in different pricing of different orders.
- Trading Orders can be Market Orders, Limit Orders, Stop Orders or even Conditional Orders.