In finance,a brokerage order from an investor to a broker to sell a quantity of stocks, shares, bonds, or other investment assets is referred to as a sell order. In order to instruct a stock broker there are a number of different types of sell orders that an investor can use.
4 Important types of Sell orders
Market sell orders, limit sell orders, stop orders, and trailing stop orders are some of the important types of sell orders.
Market sell order
Usually a market sell order is considered to be the simplest type of sell order that can be issued by an investor. In this type of order an investor order to a stock broker to sell the asset at current market prices, with immediate effect.
Limit sell orders
Limit sell orders are considered to be more protective type of investment order.In this type of order, the broker is instructed by an investor to sell, but only at a certain specified minimum price.
According to this order the broker will only execute the order at the price indicated, or better. In this way, the investor limits the risk that is involved with the sale.
Stop orders
Sell orders that turn into market sell orders as soon as a certain price, called the activation price, is reached are referred to as Stop orders. It is necessary that a stop order must be lower than the current market price. As such, this type of order is considered by investors as very important protection devices used to limit the potential loss that the investor is exposed to.
Trailing stop orders
A special type of stop order where the activation price can move up automatically if the stock or share that it is attached to rises in value is known as Trailing stop orders. It is necessary that a stop sell order must be lower than the current market price, and it should be specified in either points or as a percentage. This type of sell order is used by an investor in order to ‘lock in’ profits on a rising stock.
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Posted by R. MAK. in Business, Markets, Stock Exchange, Stock Trading, Trading · 0 Comment
