So, you’ve chosen a stock or asset that you want to invest in and you know how many shares you want to buy. Now, you’ve just got to place the order.

For novice investors that may be trickier than it seems because before placing that order, you’d have to choose an order type.

Simply put, order types are instructions to your broker about how to execute your trade.

There are 4 basic order types: Market orders, Limit orders, Stop orders, and Stop-limit orders.

  1. A market order is an order to buy or sell an asset immediately.

2. A limit order is an order to buy and sell an asset at a specified price or better.

3. Stop orders are orders which are activated only if the market price crosses above or below a predetermined number for a buy or sell order.

  • A buy stop order is entered at a stop price above the current market price and a sell stop order is entered at a price below the current market price.

4. A Stop-limit order is a combination of a stop order and a limit order.

An example of a buy order:

  • We want to buy an asset if it goes above $450.

  • We then say that our limit is $460, this is the price that we're willing to go up to for the asset.

  • Based on this, your order will be placed if/once the asset crosses above $450 as long as the market price is still under $460.

  • With Capitalise.ai, you'll have to define both the limit rate and the stop rate.

*Please note that all screenshots and examples are only shown for the purpose of a technical demonstration and should not in any way be construed as recommending any type of trading strategy and they do not constitute any form of advice. Please click here for further explanation.

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