Limit, Stop, and Market Orders

[Bobby Jay]

Hi, I'm a newbie in stock trading. I tried to goggle my question but I couldn't find the answer. Can you use stop limit order to exit your position? Thank you.

I prefer to use stop limits when I am entering a trade. But I'll suggest not using stop limits when exiting a trade. The reason is because there is a possibility that your order might not get filled.

 

[viruscore1]

I've Googled around, but there's a lot of conflicting information out there, so I come to you, here at Elite Trader, for The Truth.

As I understand it, for U.S. equities:

Market Order. Executes at the best available price standing on the book.
Example: Bid/Ask for MSFT stands at $60.42/$60.43. Market buy order entered, BOT at $60.43.

Stop order. Becomes a market order when the specified price is reached
Example: +200 on MSFT, stop sell set at $60.10. Downspike. Bid breaches 60.10, stop becomes a market order. By the time that this market order is first in line, the bid/ask is at $59.83/$59.86. SLD at $59.83.

Limit order. Does not become a market order when price is breached.
Example: MSFT stands at $59.83/$59.84. Limit buy set at $59.42. Downspike to $59.31/$59.32........................

What happens here? If the price downspikes through the limit buy, and there are not enough orders on the book to fill it at the specified price, is it discarded, or filled at a lower price?

Along the same lines, what's the best way to get a specific price on an equity?

Thx, Keith =^)

Should be filled at the lower price. It's happened to me.
Large quantity orders, HFT may step in, fill your order at your limit price and buy back at lower price.

 

[traider]

If my limit order for MSFT is $60. Will I always get executed only at $60 without any price improvements ?

 

[CyJackX]

If my limit order for MSFT is $60. Will I always get executed only at $60 without any price improvements ?

Without slippage, yes.

 

[Tim Smith]

If my limit order for MSFT is $60. Will I always get executed only at $60 without any price improvements ?

@CyJackX ..... Unless its an IEX D-PEG order.

@traider see above. That's assuming you don't want to call the sub-penny rubbish the HFTs give you on non-IEX exchanges "price improvements". They like to call it "price improvement" because it sounds good for their PR, I call it bullshit. The HFTs are queue jumping scalpers. The only place you get genuine price improvement is IEX.