MARKET ORDER
Order to buy – stocks will be bought at the lowest available price on the market
Order to sell – stocks will be sold at the highest available price on the market
LIMIT ORDER
Order parameters:
Limit price (price condition)
Order to buy – stocks will be bought at the lowest available price on the market, at the set limit price at the most.
Order to sell – stocks will be sold at the highest available price on the market, at the set limit price at least.
STOP LIMIT ORDER
The order can also be described as a limiting order with an activation condition. It is primarily used for a timely response to a fast market change.
STOP LIMIT ORDER TO BUY
Use:
The client wishes to buy securities on the condition that the price breaks the set barrier. But at the same time the client wishes to set the maximum price at which the client is willing to buy. (For example, the announcement of important results of a company is expected. If the results are extremely good, the stock price can break a significant barrier and soar. In such a case, the client wishes to profit from such growth.)
Order parameters:
Activation price: The price activating the order to buy. To activate the order to buy, such a price or higher price must be traded once on the market. Condition for setting the activation price: The activation price must be > the current price (price of the last concluded trade).
Limit price (price condition): The maximum price at which the client is willing to buy securities.
Example: Stop limit for purchase
• Current price: CZK 480
• The client wishes to buy securities on the condition that the price breaks the barrier of CZK 500, but is not higher than CZK 515.
• The client will give the order: STOP LIMIT
• Activation price: CZK 500
• Limit price: 515
If a price that is higher than or equal to CZK 500 is traded, an order to buy will be sent to the market. As for the type, it is a limit order. Securities are bought at the lowest available price on the market, at the set limit (CZK 515) at the most.
