Individual Stocks

Selecting Individual Stocks

What other types of special orders may help investors when executing trades?

In addition to market and limit orders, there are a few other special orders that may be available to the investor, either at a brick-and-mortar brokerage firm or an online brokerage site. A stop order or stop-loss order is used when you want to buy or sell a stock at a specific price, also called the stop price. A buy-stop order is executed at a stop price somewhere above the recent market price. A sell-stop order is executed at a stop price below the current market price. Investors like to use buy-stop and sell-stop orders to limit losses and to protect profits when executing trades. You should check the specific rules at your brokerage firm (whether full service or online) regarding at what price your order will be executed. Some firms use current quoted prices, while other firms use the last-sale price to determine the stop or buy limit price to be executed.


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