What is “order”
The order of the user of the investor to the broker or brokerage firm for the purchase or sale of securities. Orders are typically placed over the phone or online. Orders fall into different available types that allow investors to impose restrictions on their orders affecting the price and time at which the order can be executed. These instructions order will affect the profit or loss of the investor for the transaction and, in some cases, whether the order is executed at all.
Breaking down the “order”
Order first step in the process financial transactions. Work with investors, brokerage firms and trading platforms for the buying and selling of securities for investments. There are many exchanges in the market, which allows investors to trade all types of securities. The most common is the secondary market where millions of transactions take place matching buyers and sellers every day. In the secondary market is provided for placing investment orders from retail and institutional investors. Also there are other markets for the exchange securities, including the third markets, fourth markets, and dark pools.
As a rule, on all exchanges trading in securities in the bid/ask process that allows investors get the price they are asking, depending on their type, with scatter pays a market-maker. Market makers work on all types of exchanges.
Types Of Orders
Secondary market is one of the most active markets in the financial industry with orders accepted from individual and institutional investors. Individual and institutional investors must trade through a broker-dealer that require them to place one of several orders. Markets are some of the options include some investment discretion in planning the trade order.
Market order: a market order gives a broker or a trading partner to fulfill the order at the next available price and the end of the day. Market orders do not have a specific price and, typically, always done, if there is no liquidity.
Limit order: a limit order gives the broker or trading partner, to buy a security at or below a specified price. Limit orders ensure that the customer pays only for the specific purchase price of the securities. Limit orders can remain in force until their execution, expiry or cancellation.
Stop order: a stop order gives a broker or a trading partner for sale in a security if it reaches a certain price. The price can be stop loss or take profit.
Day order: a day order must be executed within one trading day that the order is placed. Most market orders are usually day orders.
Fill or kill: a fill or kill order must be executed immediately and completely or not at all.
There are several options the foreign exchange market beyond the traditional secondary market. These markets may include over-the-counter market (the third market), fourth markets (institutional trading) and dark pools (special access to the institutional trade). All of these markets will use the same market orders on the secondary market and can be transacted at the BID/ask process.