Different Types of Sells

[dwest718]

This isn't exactly a TA question and I feel kind of dumb for asking but can someone explain the different types of sells to me and how they work. 
(Limit vs. stop vs. stop limit vs. trailing stop)

[eliteG]

Limit - means that the execution must happen at the exact price you specify(or better such as if you put in a buy order at $1.25 limit you could get filled 1.25 or lower but not higher..).

Stop - is a triggering execution mechanism.  You set the price that the order will trigger at.  There are 2 types of execution methods market or limit.  When you are holding a stock long and have a sell stop mkt order set below, when the stock falls below or at the stop trigger the shares will be sold at the market(best bid).  This includes a gap down which would be sold immediately.  When you are holding a stock long and have a sell stop limit order set below, when the stock falls below or at the stop trigger the order becomes active and will only sell at the price you have designated(you enter both a stop and a limit in a stop limit order).  You can also use a stop to initiate a position(long or short).

Trailing stop - can be mkt or limit order types.. but it is a stop that will follow your order up if you are long, down if you are short at a range you specify(ex: $1.25 away from the price).

I recommend the use of a stop-mkt order always instead of a stop-limit because you can be caught holding a stock as it moves against you with a limit order.  I use a limit order to buy and to sell but my stop is always a market order.  I do not use GTC(good till canceled) because I like to set my orders up everyday.  I do not use AON(all or none) because then I would never get any shares so I am constantly modifying my order to get filled.

Hope this helps. 

[boatguy]

E trade Pro also has the following:

Market on Close (stock only) — For execution at the closing price for the security

Fill or Kill (stock & options) — For immediate and complete execution or the order is canceled

Immediate or Cancel (stock, options, & extended hours) — For immediate execution (can be partial) or the order is canceled

Reserve order: Reserve Orders enable you to "show" your equity order to the market as a series of smaller orders, thus concealing the true size from other traders. This can be especially useful for a large order, as it can help minimize adverse price movements before the order is fully executed.


Nice to have different options even though they would not be used as often.

Ken

[boatguy]

Copy and Paste from etrade pro explains trailing and bracketed stops(sell/buy)

Understand how a trailing stop order works Trailing stop orders are designed to help you protect any gains and limit losses automatically. The order follows the stock's movement tick by tick so you don't have to.

With a trailing stop order, you set the stop as a distance in either points or percent from the stock's current bid or ask price (the bid price for sell orders and the ask price for buys). This is in contrast to a regular stop order, where the stop is set as a fixed price.

After you submit your trailing stop order, the trailing stop level adjusts itself automatically, following (or "trailing") the stock's bid or ask price, but moving only in a direction favorable to you, in accordance to the parameters you defined for your order. All trailing stop orders are held at E*TRADE Securities until triggered. Once the bid or ask price crosses the trailing stop level, the order is triggered and sent to the market center for execution as a market order, and executed at the prevailing bid or ask price.

As an example, let's say you own shares of stock XYZ (currently trading at $15), and you decide to place a trailing stop order with a trailing stop value of $1. (You can also set this value as a percent.) This means that you want to sell the shares when the bid price falls $1 from the highest point it reaches after order placement. In other words, $1 is the maximum you want your trailing stop level to be away from the prevailing bid price. Your initial trailing stop level, then, gets set at $14 -- or $1 below the current bid -- and the trailing stop will ratchet up if the stock price rises. If XYZ climbs to $18 without falling $1 at any point along the way, your trailing stop level will rise to $17, moving up in lock step with the bid price. If XYZ then dips below $17, your order will then be triggered and sent to the market center for execution as a market order. In the same way, if the stock had immediately fallen from $15 to $14, your order would have been triggered for execution at that time.

You can use trailing stop orders for the following types of trades: buy, sell, sell short, and buy to cover (to close a short position). For step-by-step instructions on placing a trailing stop order, see the Help topic Enter an Advanced Order.

As with regular brokerage orders, you can submit a request to change or cancel a trailing stop order as long as the order hasn't yet been triggered or executed.

A bracketed order combines the benefits of a stop (for risk management) and a trigger (designed to potentially get you in or out at a price you consider too good to resist). This can free you up from following a stock's movement tick by tick before you enter your order.

A bracketed order is essentially two orders in one:

    * An upper or lower trigger (for sell or buy orders respectively); and
    * Either a trailing or fixed stop, depending on your preference.

The trigger and stop serve as "brackets" around the stock's bid or ask price (the bid price for sell orders and the ask price for buys). If a trailing stop is chosen, the stop level adjusts itself automatically with the bid or ask price, but moves only in a direction favorable to you, in accordance with the parameters you defined for your order. Fixed stop and trigger prices, however, do not change. All bracketed orders are held at E*TRADE Securities until triggered, at which time they are sent to the market center as market orders and executed at the prevailing bid or ask price. For more information about trailing stops, see Understand how a trailing stop order works.

As an example, let's say you own shares of stock XYZ (currently trading at $15). You place a bracketed order with a trailing stop value of $1 and an upper trigger of $18. This means that you'd like to sell the stock if it hits $18, or if it falls $1 from the highest point it reaches after order placement. In other words, $1 is the maximum you want your trailing stop level to be at any time from the prevailing bid price. (You could also have set this distance as a percent.) Your initial trailing stop level, then, is $14 -- or $1 below the current bid -- and the trailing stop will ratchet up if the stock price rises.

Let's take a look at a couple ways this bracketed order could execute:

    * Order is triggered by upper trigger price. XYZ rises to $18 without falling $1 at any point along the way. The order is triggered when the stock's bid price hits your upper trigger price of $18, and is then sent to the market center for execution as a market order.
    * Order is triggered by stop. XYZ rises to $17.50. As a result, your trailing stop level resets itself to $16.50, or $1 below the stock's highest bid price since your order was placed. XYZ then falls below $16.50, triggering your order. The order is sent to the market center for execution as a market order.

In the same way, if the stock had immediately fallen from $15 to $14, the trailing stop component of your bracketed order would have been triggered for execution at that time.

You can use bracketed orders for the following types of trades: buy, sell, sell short, and buy to cover (to close a short position). For step-by-step instructions on entering a bracketed order, see the Help topic Enter an Advanced Order.

As with regular brokerage orders, you can submit a request to change or cancel a bracketed order as long as the order hasn't yet been triggered or executed.

Understand how a hidden stop order works Some brokerage firms send stop orders directly to market centers where the orders await execution. (Stop orders execute based on customer-specified price conditions.) Other brokerage firms can hold stop orders in-house and route them to market centers only when the orders are triggered. At E*TRADE Securities, we offer both options, allowing you to choose what's best for your individual trading strategy.

A hidden stop order is a fixed stop order which is held at E*TRADE Securities. It is sent to the market center only upon being triggered, which happens when the stock's bid or ask quote crosses your stop price. The order then becomes a market order and is executed at the current market price.

A market-held stop order, on the other hand, is sent to the market center as soon as it passes E*TRADE Securities' routines and edits, and it resides at the market until it is eventually triggered and executed. Like hidden stops, market-held stops are also fixed.


As with regular brokerage orders, you can submit a request to change or cancel a hidden stop order as long as the order hasn't yet been triggered or executed.

[dwest718]

I enjoyed your novel  .

[boatguy]

Sorry, Couldn't link to it

[dyc100]

Thanks for your time going thru these sells, I learn a lot!

[Av8trader]

Hi,

Could someone please explain when you would want to make the limit amount dfferent from the stop amount when setting a stop limit order.


Thanks in advance!