Our online trading platform is ideal for quickly and easily buying and selling shares online. But before you get started, it’s important to understand the different types of orders you can place and the options you have for setting the price at which you trade. Find out more about all these in this guide.
Orders are simply instructions to buy or sell shares. The most common types of share trading orders are buy and sell orders. You can also place stop loss sell and target buy orders, which are known as trigger orders and are more specialised orders used by advanced share traders.
The basics of an order are your instructions which specify:
When placing a trigger order, you’ll also choose a trigger price, which we’ll explain a bit later.
But before we look at each of these order types in detail, it’s important to understand your choices when setting your price. For every type of order you can choose to trade at the current market price of a share, or you can choose a limit price. This guide will take a look at these concepts.
The market price of a share is the best available price on the market at any given time, and is only an option while the share market is open.
If the price you pay or receive is very important to you, choosing market price might not be the best option. Generally, the benefit of trading at market price is that your order should trade quickly.
A limit price is different; it’s an instruction to buy or sell a stock at a specific price or better so it gives you more control over the price. It’s the price which you feel comfortable buying or selling your shares. If you are buying shares, a limit sets the maximum price you are willing to pay. If you are selling, a limit sets the minimum price you are willing to receive.
While setting a limit price means you won’t trade outside a specific price range, it does mean that your order may not trade (or execute as it is often called in share trading). For example, if you are buying, your order may be queued behind other buyers depending on the volume of shares available for sale at a specified price. Orders are queued on the market in the order in which they were placed on the market and they can remain queued for up 20 business days. If your limit order doesn’t trade within 20 business days, it will expire and you will need to replace it.
To learn more about order queuing, take a look at our guide on how the share market works.
A buy order is the standard order type for buying shares. Your instruction will specify:
A sell order is the standard order type for selling shares. To place a sell order you simply need to specify:
A target buy is a type of trigger order and allows you to control when your order will be sent to the market. This is done by specifying a trigger price; a price at which your order to buy is placed on the market and becomes active. Your order will only be actioned (triggered) if the shares you wish to buy begin to trade at the price you’ve specified.
This trigger price is always above the current market price for that share. Target buy orders are aimed at traders who believe that if the price of a stock reaches a certain level, the share price will continue to rise so they want to buy in and take advantage of that rise.
As well as setting a trigger price for a target buy order, you also need to set a price per share (like you would for a standard buy order) which is the price you are willing to pay for the shares.
You can choose to set a limit price - a maximum price which you are prepared to pay per share. The shares will be purchased at no more than this limit price. Just be aware that if you set a limit price and the market rises quickly, you may miss the opportunity to buy shares if the market moves above your limit price.
Alternatively, you can choose to trade at the market price for that share, but you’ll have no control over the price you pay.
A stop loss sell is a type of trigger order and allows you to control when your order will be sent to the market. This is done by specifying a trigger price; a price at which your order to sell is placed on the market and becomes active. Your order will only be actioned (triggered) if the shares you wish to sell begin to trade at the price you’ve specified.
Stop loss sell orders are designed to stop your loss in the event the price of your shares in a particular company begins to fall and you wish to sell the shares. For that reason, the trigger price is always below the current market price. Traders will use a stop loss order when they believe that if the price of a particular stock drops to a certain level, the share price will continue to fall.
As well as setting a trigger price, you also need to set a price per share (like you would for a standard sell order), which is the price you are to receive for the shares.
You can choose to set a limit price - a minimum price which you are willing to receive per share. The shares will be sold at no less than this limit price. Just be aware that if you set a limit price and the market falls quickly, you may miss the opportunity to sell if the market moves below your limit price.
Alternatively, you can choose to trade at the market price for that share, but you’ll have no control over the price you receive.
Sometimes we may not accept your order. There are a number of reasons for this, which may include your specified price being too far away from the current market price, or if the security you want to buy is not available because it is suspended, halted or delisted.
ASB Securities reserves the right to take any steps we think are necessary to check the bona fides of any client, order or instruction before acting on that order or instruction.
ASB Securities reserves the right to cancel your order if it doesn’t comply with validation rules.
ASB Securities reserves the right to charge you a fee plus any costs if:
ASB Securities Limited is a NZX Firm. ASB Securities terms and conditions apply. The above information is a guide only and should not be relied on as it does not take into account your personal financial situation.