Order Types

When trading stocks, it is important to understand the different types of orders available, as they can impact the execution of your trade and the price you pay for a stock. The following are the most common types of orders used in the stock market:

1. Market Order: A market order is an order to buy or sell a stock at the current market price. The trade will be executed as soon as possible at the best available price. This type of order is best used when you need to buy or sell a stock quickly and are not concerned about the price you pay or receive.
2. Limit Order: A limit order is an order to buy or sell a stock at a specific price or better. For example, if you place a limit order to buy a stock at Rs. 100, the trade will only be executed if the stock is available at Rs. 100 or lower. This type of order is best used when you want to buy or sell a stock at a specific price and are willing to wait for the price to reach that level.
3. Stop-Loss Order: A stop-loss order is an order to sell a stock if it reaches a specific price. For example, if you have a stock that is currently trading at Rs. 100 and you place a stop-loss order at Rs. 95, the stock will be sold if the price falls to Rs. 95 or lower. This type of order is used to limit losses in a stock that you own.
4. Stop Order: A stop order is an order to buy or sell a stock once a specific price has been reached. For example, if you place a stop order to buy a stock at Rs. 105, the trade will be executed once the stock reaches a price of Rs. 105 or higher.

It is important to keep in mind that there is no guarantee that a trade will be executed at the price specified in a limit or stop order, as market conditions and other factors can impact the execution of the trade. Additionally, different brokers may have different rules and restrictions regarding the use of different order types. It is important to understand the policies of your broker.