buy order


A buy order is a specific instruction made by an individual to a broker to buy a security. If a trader expects the market’s price of a security to go up, he would enter the trade with a buy order, and exit the trade with a sell order. Conversely, if a trader expects the market’s price to go down, he would use a sell order to enter the trade, and square-up using a buy order. Traders have access to many different types of buy orders:


  • Market Orders: Market orders are orders to buy a contract at the current best price. In a fast moving market, such type of orders will always get instantaneously filled, but not necessarily at the exact same price that the trader intended.
  • Limit Orders: Limit orders are orders to buy a security at a specific price. Limit orders may or may not get filled depending on the direction of the market. Limit orders are used by traders who want to make sure that they get a suitable price, and are willing to carry the risk of not being filled at all.
  • Stop Orders: A buy stop order is an order to buy a contract once the price reaches a specified level, known as the stop price. When the security hits the stop price, a buy stop order becomes a market order.