Basic Trading

When you are purchasing you stock, you'll notice there are a few options. At first it may seem confusing but it is actually very simple.

The first option is whether you would like to place a "Day Order" or a "Good Until Cancelled". It's exactly what it sounds like. A "Day Order" will be automatically cancelled if it is not settled on the day it is made, while a 'Good Until Cancelled" will remain open until it is settled.

This might leave you asking why a trade wouldn't be settled immediately. The answer leads into our next trading option: "Market" or "Limit" order. A "Market" order will execute immediately at the current market price of a stock, which may be higher or lower than you were quoted mere seconds earlier when you put in the order. A "Limit" order on the other hand allows you to set the price at which you are willing to buy or sell a stock, protecting yourself against fluctuations.

These options can be mixed and matched to offer you a great degree of flexibility when trading your stocks. Remember that while you are sitting at your computer, there is an actual broker at the New York Stock Exchange (NYSE) who executes your order. Stock prices are fluctuating constantly in real time and your ticker may not be exactly up to the minute.

Trade carefully folks!