How to buy U.S. stocks, opening a U.S. stock account as mentioned above is only a basic step. Before the official start of US stock trading, there is still a lot of preparatory work to be done, including selecting the type of US stock trading order. What are the types of US stock trading orders in the market? How to choose the US stock trading order type that suits you?
US stock trading order type 1, market order
A market order is an instruction to immediately buy or sell a certain number of futures contracts at the best price or market price in the market at that time, that is, it will be executed immediately when the exchange receives the US stock price buy or sell order, no matter what the current market price is. The advantage is that it guarantees an immediate deal. However, it should be noted that the market order does not provide price protection, especially in a fast market, the transaction price of the market order may be much lower or higher than the currently displayed price.
US stock trading order type 2, limit order
A limit order means that it will only be executed when the specified price is reached or there is a better price, which is similar to the "ordinary order" in A shares. Unlike market orders, which give priority to guaranteeing the transaction speed, limit orders frame (or better) prices, enabling investors to clarify the transaction price and range, rather than pursuing transaction speed or whether a transaction is concluded.
Limit order is a type of order commonly used by investors, but once the direction of US stocks is determined in a market with good liquidity, the price often changes at a fairly fast speed. If a limit order is used, it is often possible to miss the market because the limit price deviates from the reasonable transaction price, resulting in the inability to trade and miss the market. Therefore, investors must carefully consider the order mode used according to their own judgment on the market.
US stock trading order type three, stop loss order
Stop loss order, which means that in US stock trading, investors preset a stop loss order, and when the market price reaches the trigger price set by the trader, the outstanding position will be automatically liquidated; simply put, it is through the execution of stop loss An order formed by an instruction. A stop loss order can be guaranteed to be executed immediately after the stock price hits the set stop loss price, but because it is a market price pending order, it is not guaranteed to be executed at a specific price.
US stock trading order type four, stop limit order
A stop-loss limit order is a combination of a specified stop-loss price and a specified limit price entered in the order. Once the market price reaches the set stop-loss price, the price of the limit order will be way to place an order. The stop limit order avoids the price uncertainty risk of the stop loss order, but it has the characteristic that the limit order does not guarantee certain execution. Even sometimes, due to the rapid drop of the price below the limit price, the order may not be executed, resulting in continuous expansion of losses.
US stock trading order type five, trailing stop order
Trailing Stop Order (Trailing Stop Order) does not limit the stop loss price itself, but can set the difference between the stop loss price and the market price. When the US stock price reaches the set stop loss price, a market price order will be issued . The setting of the price difference can be expressed by the amount or the percentage of the market price. The stop loss price of the trailing stop loss order is automatically adjusted, that is, the stop loss price will change according to the price difference (amount or percentage) set by the investor as the market price changes. The stop loss price of an ordinary stop loss order is a fixed price. Using this order, the maximum possible loss can be limited without any limitation on the maximum profit.
US stock trading order type 6. Conditional order
A conditional order is a special "trigger" order, which needs to specify a (trigger price) and the actual order price. Once the stock price reaches the trigger price range, the system will automatically submit the specified order to the exchange (equivalent to automatically submitting a Ordinary order), and the order will not take effect when the trigger price is not touched.
This type of US stock trading order is often used in volatile market conditions. When the market changes drastically, because it is impossible to keep an eye on the market all the time or the stock price changes too fast, it is advisable to set this kind of order.
The Doo Prime platform provides a variety of US stock trading order types, and also provides investors with multiple analysis and trading tools to help investors seize market opportunities. Interested investors can log on to the platform to obtain.