FRM: Order Types (market, limit, stop, stop-limit) 

I'll probably have to watch this video 50million times to try to fully understand the logic of all this, but it's still the best video I've seen yet. Thank you!!!!

It is still confusing for two reasons. One, it assumes that the price rises on the buy. So people say, why would I buy higher. To show this, the buying need to be shown below the market price. So the buy limit $28. So as the price drops, it reaches $28, the buying executed. The other problem is that while in most places you are saying it right, the order sent to the market, I think in the first part you say the order will be filled above that price. Unfortunately it will only be filled if someone is willing to buy it or in the case of a buy, if someone is selling it. The market price is the last price but it does not guarantee that it will not turn around as the next buying is not willing to pay that price. I don't know if all this can be shown on one graph. TD also calls the Stop order, Stop-market order. :)

I finally get Limits and Stops!! I've watched so many vids and never got a real understanding of the distinction between limits and stops. Now I do. Your illustrations really helped. Thanks so much!

This is the best explanation of market, limit, stop and stop-limit that I have seen so far. Thanks a million.

I am a beginner and a lot of time I only use market order to buy stocks. Ihave tried to learn the different among limit, stop, and stop limit. Your explanation is more understanding than others. Now I feel more confident to use these orders.

There is an information overload one searches over these topics online. But the key understanding of these concepts are clear when one can really differentiate and compare between each entity. Your explanation about the uncertainty of price with certain orders and how you lock with limit is the best Ive seen so far. The pictorial diagram really helped. Thanks

This is the best explanation of order types that I’ve seen. I have watched more than 10 RU-vid videos on this topic and it still was not clear. This was so straight forward, the words, the great graphics and this great instructor made it all clear. I subscribed !!

This is the first set of trader videos I've stumbled across that's actually helpful with explaining things. From a newbie with the capital to justify this lifestyle, thank you so much.

by far the easiest and best explanation on how to buy and sell stocks thay I've seen on the net.

Yep. Definitely the clearest explanation I've seen thus far on this. The ambiguity that other videos left on the distinction between a stop and a limit is rather maddening in retrospect. You've got a new subscriber. Thanks for the time that you put into this!

Hi David, great video. Please clarify these 2 things for me: 1 - does the STOP in a STOP-LIMIT , always act as JUST the trigger for the limit ? and 2: what happens to the STOP in a STOP-LIMIT if the LIMIT is not reached at all? ex: i buy stock @ 10 thinking it will go to 100. i set a STOP-LIMIT sell order for stop@ 80 and limit @ 100. If the price never reaches 80, nothing happens; if it reaches 99 but then drops, will it be sold as a market order @ 80, or once it reached 80 it became a limit order but since the price never reached the limit , nothing happens, my order is not filled at all ?? To protect my profit in this case, is only a trailing-stop the solution?

Your Chart Beats all the other explanations. Direct and Clear! and is there a way to get that full chart in one frame?

Probably the best explanation I’ve found on RU-vid

Best explanation so far and beautifully done too, I keep coming back to it, over and over again

This is the bestest explanation I’ve ever seen, so far.

This was the clearest example i’ve seen of market orders thank you very much. The only thing left that i’m having trouble understanding is trailing stops

Probably the clearest explanation I could find for these concepts. Thanks.

Great explanation HOWEVER: It is assuming one wants to buy above the current price, and sell under the current price. What about the opposite scenario?

For the stop-limit @ $35 / $37 example, you said that after the price reaches $35, the limit order of $37 is triggered and your order will be filled at a price $37 or better (e.g. 36.90 like you've said in the video). Why wouldn't your order get filled at $35 after the trigger when $35 is better than $37 and $36.90? Would appreciate it if you can clarify this concept for me!

Watched a lot of videos, Best explanation till date. Staright to the point and clear

awesome, best crisp way of presentation. one picture and less words of explanation needed.

Still the best and clearest explanation after all these year. Thank you.

Hello, first of all, great video! I am new to investing and am a little confused. Why would you want to place a limit order above the market price? I always thought limit orders were the least that you are willing to pay per share?? Not more than what the market price is. Sorry if this is a dumb question, I'm just confused haha

Confusing names for some of these. For example, a stop market sale could be called a trigger market sale instead, since the specified price will trigger a market sale. The term "stop" is confusing because what actually is stopping? Normally stop means for something to cease, not move, discontinue what it was previously doing... so this is not a good use of the word. The only thing we might be "stopping" is retaining that stock but trigger market sale is (in my opinion), a much better term. In fact since we are not really stopping anything, this could be called a conditional start market sale, since we would be initiating a market sale at some set price. Many others could have been named better too to help alleviate confusion.

Hey David thanks for the illustration. This has been the best video yet. Maybe it's starting to click because I've watch so many other videos on the same concept but none of them have shown visually all the type and there uses. The only thing your missing is a trailing stop but it was better not to have added it because this videos fantastically described the basics. Thanks

Beautifully explained. The best I've seen. Thank you.

it depends on the general direction prices are moving in.... if prices are rising when you buy then you want to set a limit above the current market price to "limit" the amount you pay - kinda like a ceiling.

this is by far the best video explaining those order types

Think I may have worked it out - if going long, and say the the limit was 37, the price could shoot past it and the order would not be filled. But if a stop triggered it at 35, you would have a chance of getting filled any point between 35 and 37, i.e. far more chance of getting filled. Correct?

Excellent as usual. I watch all your videos your heuristics are unparallelled... If I may humbly offer a suggestion. It would really stick if you could give a quick example of why an investor would want a limit order, stop limit, etc. Your stuff is great if I am ever going to take a CFA or FRM im buying it hands down!

ugg after countless search this is the so far the best explanation! thank u

The best explanation I have seen thus far stop limit vs stop loss.

Perfect explanation. This should be included to all new brokerage accounts

This is the first stop limit video that I grasped. Well done!

Thanks for the information, I am confused, in your example if I am placing an order to BUY wouldn't it be the lower the better for the price to go down, why would I place a stop. How does stop-limit differ from just limit. Thank you again

Hi thanks for the video, its much clearer than all the other information I have seen. Unfortunately I still don't understand the stop limit. So for the buy example, the price hits $35, which triggors a stop to buy, which is a market order at $35? And at the same time is a limit order to buy, which will buy at a price better than $37? Does that essentially mean then that it will triggor a market order at $35, but wont fill the market order higher than $37? Sorry if that's off the mark.

Best explanation I've seen on this. 10 year old video, too.

I understand everything apart from Stop orders. So market and limit orders are simple. I have missed out on buying trades by fractions of 1% where had I set a stop order I would have got it. I believe I could have set a buy of 5000 say, (I missed out on a trade that dropped to 5001 before going back up!), but to have a higher buy level of 5100 in case the lower level was not reached. Once the price drops below the 5100 level I assume that the 5100 level then becomes active as the fall back buy option and in this example the buy would have executed at 5100!? Also, I need to protect myself from bad investments and set up stop orders to limit losses.

Certainly a well organized presentation - especially with the visual graphic. Additionally, organizing the presentation into distinct Buy and Sell sides makes everything clear whereas other videos do not do this and thus confusing as to application.

Best Explanation I have seen so far! Thank you.

Finally understood this lesson. Your visual graphic helped me a ton. Thank you

bionicturtle, I just wanted to says thanks for covering all these finance topics that are tough to find educational videos on!

Wow! Great graphical explanation 👍👍👍I read and watched these order types elsewhere, but this vid finally helped me grasp the definition.

I still can't decide which order type is overall the best route to take. Im 100% new to buying and selling stocks.

u the man bro. i'm still kinda iffy on the whole sell at a stop-limit order or stop order though. so stop at 25 sells around 25? so it could sell at 24.50 and 25.50? right depending on what the market price is at that time?

This is the most concise and best explanation I have found. Thank you!

Very clear and perfect way you explained this. Graphical [presentation makes things much easier. Thanks

Does a limit order need to be fully filled before it is processed? How much time is a limit order given before it is canceled if the order was not fully filled? Also the limit price is set by last stock sold price?

One of the best video explaining this subject

First time I see your channel so I don't know what platform you use to trade. Can you show how to do it on thinkorswim (TOS)? I'm buying to open using STOPLIMIT but can't find a way to do it fast on TOS. In active trader tab there is no option for STOPLIMIT so I have to right click the chart, click buy, click edit, then select STOPLIMIT from the drop down. Needless to say this is too long for active trading.

On the buy side if you put your stop-limit order with the stop @ $35 and limit @ $37.... when the market hits $35 and your limit to buy @ $37 or less goes in.. are you now more likely to get filled at the higher price of $37 while the market currently trades at $35 ?? If you assume the market price hangs around at $35 (but obviously there are still sellers in the level 2 above the current the lowest asking price of $35 that want to sell their shares at higher prices like $37) am I more likely to get paired with these higher priced sellers since my limit order is @ $37 or would I automatically be paired with the current best asking price at the time? I just want to make sure I understand all of the angles. Thanks to anyone who can answer this question

Very clear! Thank you! The clearest explanation so far!

Wow, Thank-you so much for this video. I've always been confused about buy-limit stop limit...

Best explanation I’ve seen on the subject. Love the graphics! So on stop limit, does it mean once he stop triggered, the shares are available at limit price or better and sold right away or we have to wait for the price to drop to limit price to excite? Also, I’m using interactive brokers, why is their default limit price is higher than stop price on a sale order? Thanks

Amazing explanation and breakdown! Best video on the subject on RU-vid. Thank you.

so limit orders always become market orders ? correct ? If you place a limit order above the price say you are buying will it still limit ?

Best explanation I’ve seen yet

Also, can I place a limit sell above the current price? So say the market is at $30, like in your example, and I want to ensure a certain profit (for sake of the example say 10% gain), could i set a market limit for $33? ( I do understand that it can't be "ensured", but this is under the assumption that the price WILL rise) To explain this desire to set a limit sell above the current price: I'd want to set this limit sell because the stock hasn't been performing particularly well, but I expect that it will, but only 10% greater than the current price of $30.

This is good but it still leaves me wondering why anyone uses a stop limit - in your example of going long, instead of a stop limit triggered at 35 for 37, why not just use a limit order set for 37? Thanks.

I have a question. suppose the normal price of a stock was 10 and it is on a high ride of 30 and climbing up wards ue to positive news and future gains. I hit a Market order to sell 1000 shares , Will i I get a price close to 30 OR Above if the stock is still climbing above 35 or so ? It says you will get the lowest of the market order for that shares. What if some people had put in an order to buy at USD 4 or USD 7 and those orders being the lowest, will i get those 4 or USD 7 prices for the shares I sell on Market order or or prices where the share is currently trading around 30 and above ... Thank you for the support in advance.

Best video I've seen to explain this- thank you

Will market orders fill closer to the current price as both volume and number of traders increase?

When would you need to use a Stop order when buying? I do not see the point of that because it sounds like you wait until the price gets to a certain height before the order is made. Wouldn't you always want to buy the stock as low as possible?

I have a question. Say I own 100 shares of company A and its price is at $20 dollars a share. I want to sell at $25 if the price heads that way. Can you place a stop order above the current price of $20, at $25? so that when the market hits $25 it will execute a market order? I know you can place a limit order to do the same thing, I'm just wondering if the price touches $25 and creep's down will a limit order actually execute?

What is the best order type if you want to hide the quantity of stock you want filled?

Great video.. one question though: when you said the stop becomes a "stop and limit" (@4:24) did you mean "stop and market"?

- limit order 35 = buy at 35 or better - stop-limit order 35/37 = buy at 37 or better what's the difference? what is the additional "stop" part doing in the second case? if the aim for both is to buy at a specific price or better?

I'm still confused... How does stop limit work if you want to sell at a price higher than current price? If I buy at 30, current price is 35 I can make a limit sell at 40 and hope it gets there....but can I set an order to sell at 32 if it doesn't quite reach 40 and starts to drop?

wonderfull, even after 10 years this educational video is absolutely usefull, thank you

very informative. Good breakdown of information with an even better delivery. I also enjoyed the grafics and visual aids. Good Job!!

If the market is at 30, is there an order type to purchase if price falls below say 25? I.evCould you have a limit which is below current market for a buy transaction?

I still dont't understand the difference between the limit and stop order? It seems they are both the same thing. Say the market price is $30 and we put in a stop order of $37, does that mean that once the stock reaches $37 that we will purchase the stock higher than $37? I understand that it becomes a market order at once it reaches but does that mean we can possibly purchase at $36.90, $36.92, etc, or will be higher than $37 since it is a stop order??

if it's stop at $25 dollars, does it become a market order when the prices reaches $25 or the bid and ask reaches $25?

Usually you buy around asking price or generally higher than market price because you want to catch the stock on the upside,even if the stock has been going down you want to buy the moment it goes back up as oppose to getting it when its going lower because it could just be nosediving down for a while

best esplenation ive seen . right to the point . loved it !!!

for market order do we have to pay more for taxes when we buy? or lose money and not know how but just get our stocks

hello, In case of buy , why would someone put a limit > market price ? if market price is lower then investor will buy on ongoing market price itself

how do you sell your stock on td ameritrade by T-Stop % and $? Let's say a penny stock is .18 cents and when the market open, i know that the price will go up to 20 cents by mid day it will go to 24 cents. So let's say i want to sell my stock by 22 cents, how do you set it with T-Stop $ to sell when the price reaches 22 cents?

what does the "stop" part mean... Lets say I bought 1 share of ABC for $100 and I wanna do a Sell-Limit order. If my stop price is $190 and my limit is $200, what actually happens when it "STOPS" what does it stop doing?

I bought gopro shares at 58.00. I out a 90.00 limit on it. Does this mean it will sell at 90.00 or automatically buy at 90.00

what determines if you get filled? if you don't, do you just try again?

With my broker limit is trigered at 30$ and give me the bid price which is NOT better than what Ive setted up...! Normal?

Bravo! Crystal clear explanation ever!

thanks you so much i have watched more than 5 videos i didnt undrstand but your explaination was clear i undrstood now

What happens if the current price of a stock is $10 and you place a buy-limit order for $11, and then the stock hits $11?

Hi there, thanks for the video. I wanted to expand on limit orders. Does the limit order always gets filled if the price goes beyond the limit order? So let's say I want to go long at 35$ at market open, stock is trading at 36$, goes down to 34$ within the first minute of market open, with the wide bid spread associated with market open, will my order get filled at 35$ ?

This is all back to from though....dont you want to get it set up to sell at above the market price? Especislly with cryptio where the markets volitile by %15 each way per day?

Why would you put a limit order to buy at $35 when the current price is at $30? Everything is backwards. You'd want to buy low and sell high....should be switched sides

Why would u want the limit order for $35 when the stock is $30? Wouldn’t you want the limit order for less then $30? Why would you wanna wait in hopes that the stock price rises to pay $5 more a share? Confused? The limit order should be what the price of the stock is or at least a little bit less shouldn’t it be?

whats the difference between limit sell and stop-limit sell? im confused.

Very clear!!!! Your chart is so clear ! Thanks alot

Thanks a lot. Tried everywhere but this one expalins the best and Clear!

Question about guarantee orders but not guaranteed price. Why is the price not guaranteed? What causes the difference?

is it possible to set something that sells above the price. say i want to lock in profits at 20 price right now is 15 is this possible?

Why would you wait until the price is higher to buy? That makes absolutely no sense. You keep saying “better”, but buying at $35 is not “better” than buying at $30.

Nice....cleared some confusion...still need to apply and not fully absorbed

I cant understand why would you have the sells set for 25 when you're buying for 30? Doesnt that mean you will lose 5 dollars? Why isnt the sells for 35?

Stop-limit order. Triggered @25. Does price have to go to 23? Then placed limit order? then Can sell higher? I don’t understand how it can sell higher if you put in 23 price? Oh wait I think I get it now... wouldn’t a limit order placed above if buying be similar to market order. And a limit order to sell below price also act as if a market order? Where am I wrong here?

guys help me please: lets say my stock is at 30 and i want to take profit at 33, so i should put a LIMIT order at 33? or a STOP-LIMIT 33? which one will get filled once the stock price hits 33.thank you in advance

But still enormously informative. I don't care for words as long as they make a topic more conceiveable - and if the easiest way to say it makes it the easiest to understand - who splits hairs.