What kinds of trades do you hope to execute? Most advisors suggest you start with simple trades. Options trading, selling stocks short, and other complicated trades require more experience. In some market conditions, execution may be at a price significantly different from the current quoted price. Limit orders will be executed only at a specified price or better. Customers using limit orders receive price protection, but with the possibility the order will not be executed.
This kind of price fluctuation is especially common in very hot stocks such as IPOs. Initial public offerings commonly have rapid changes in price due to the very high volume of trading for a new offering. There are delays in quotes, since the trading is simply happening too fast for quotes to keep pace in real time. This has led many novice investors to pay a lot more than they had anticipated for a stock; this is why a limit order can be a very good thing, especially if you are new to the stock market.
A solid understanding of what can happen in a faced paced trading environment can leave you caught unawares. When the market is moving quickly; that is to say, there is a high volume of trades, causing rapid changes in price, there can be delays. These delays can cause a slowdown of the execution and confirmation of trades, which leads to quotes coming more slowly than do the actual changes in price. While web based traders have been led to expect instantaneous quotes and trades, this does not always happen in practice.
There are no SEC regulations that require a trade to be executed within a set period of time. However, if firms advertise their speed of execution, they must not exaggerate or fail to inform their investors about the possibility of significant delays.
Remember that if you want to buy or sell a stock with a price range, then you need to use a limit order. Market orders are direct buys or sells with no conditions, and are filled at whatever price the market provides. A limit order is an order to buy or sell a security at a specific price. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. Market orders do not control the price at which your order will be filled.
Should you want to buy a hot IPO that was initially offered at $9 but don't want to pay more than $20 for the stock, you can place a limit order to buy the stock at any price up to $20. By entering a limit order rather than a market order, you will not end up buying the stock at $90 and then suffering immediate losses as the stock drops later. Also remember that your limit order may never be filled if the market moves too fast before your order can be filled. Limit orders will protect you from buying the stock at too high a price.
If you are unable to access your trading account online, find out what your other options are. Most online trading firms will also allow you to make trades by touch tone phone, by fax or the old-school method of simply calling a broker and speaking to them in person. Keep in mind that any events which cause a delay in online trades will similarly affect trades made through these alternate means as well.
If you place an order, never assume anything. Some investors have mistakenly assumed their orders were not executed and placed another. Then they either owned twice as much stock as they wanted. Talk with your firm on handling these situations where you are unsure if your original order was executed. - 16463
This kind of price fluctuation is especially common in very hot stocks such as IPOs. Initial public offerings commonly have rapid changes in price due to the very high volume of trading for a new offering. There are delays in quotes, since the trading is simply happening too fast for quotes to keep pace in real time. This has led many novice investors to pay a lot more than they had anticipated for a stock; this is why a limit order can be a very good thing, especially if you are new to the stock market.
A solid understanding of what can happen in a faced paced trading environment can leave you caught unawares. When the market is moving quickly; that is to say, there is a high volume of trades, causing rapid changes in price, there can be delays. These delays can cause a slowdown of the execution and confirmation of trades, which leads to quotes coming more slowly than do the actual changes in price. While web based traders have been led to expect instantaneous quotes and trades, this does not always happen in practice.
There are no SEC regulations that require a trade to be executed within a set period of time. However, if firms advertise their speed of execution, they must not exaggerate or fail to inform their investors about the possibility of significant delays.
Remember that if you want to buy or sell a stock with a price range, then you need to use a limit order. Market orders are direct buys or sells with no conditions, and are filled at whatever price the market provides. A limit order is an order to buy or sell a security at a specific price. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. Market orders do not control the price at which your order will be filled.
Should you want to buy a hot IPO that was initially offered at $9 but don't want to pay more than $20 for the stock, you can place a limit order to buy the stock at any price up to $20. By entering a limit order rather than a market order, you will not end up buying the stock at $90 and then suffering immediate losses as the stock drops later. Also remember that your limit order may never be filled if the market moves too fast before your order can be filled. Limit orders will protect you from buying the stock at too high a price.
If you are unable to access your trading account online, find out what your other options are. Most online trading firms will also allow you to make trades by touch tone phone, by fax or the old-school method of simply calling a broker and speaking to them in person. Keep in mind that any events which cause a delay in online trades will similarly affect trades made through these alternate means as well.
If you place an order, never assume anything. Some investors have mistakenly assumed their orders were not executed and placed another. Then they either owned twice as much stock as they wanted. Talk with your firm on handling these situations where you are unsure if your original order was executed. - 16463
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