Intro to Stock Trading

Market Orders

A market order is the simplest type of stock trade you can place with your broker. It means that if you want to buy or sell 100 shares of a stock, for instance, it will get transmitted to the exchange and the order will be filled at the current price.

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Imagine you want to buy 100 shares of Apple Computer, Inc. (Symbol: AAPL). The current market price is $53.95. You log into your brokerage account or call your broker directly on the phone and tell him, “Place a market order for 100 shares of Apple Computer, ticker symbol AAPL”. By the time the order is actually executed a few seconds later, the market price may be higher or lower; $54.10 or $53.75 for example. Your cost before commissions will vary accordingly. In our example, the difference between $5,410 for the round lot and $5,375, or $35. That may not seem like much, but thanks to the time value of money, those savings can result in a substantially larger nest egg.

• The 12 Types of Trades You Can Place with a Broker
• Market Orders
• Limit Orders
• All-or-None Orders
• Stop Order and Stop Limit Orders
• Selling Short and Buy to Cover Orders (Continued)
• Day and GTC Orders and Extended Hours Trading
• Trailing Stop Orders
• Bracketed Orders
• Summary of Stock Trades