What types of orders can I place when I'm share trading?
There are a number of different types of orders and instructions. The main ones are market orders and limit orders. Market orders are instructions to buy or sell shares at the prevailing trading price. Limit orders are instructions to place your order when the price is within a limit you specify. We also provide advanced orders (stop loss and target orders) for more experienced traders in the New Zealand and Australian market.
Let’s take a closer look:
Market orders: These are orders to trade at the current market price and can be placed during market hours only. Market price is also known as the buyer's best available price. It’s the price the seller at the top of the order queue is asking, and vice versa if you are selling. Be aware the price is not guaranteed and may change in the time it takes to receive and validate your order instructions.
Limit orders: A limit order is an instruction to buy or sell a stock at a specific price or better. A buy limit sets the maximum price you are willing to pay and a sell limit sets the minimum price at which you are willing to sell. Setting a limit on your order ensures you do not trade outside a specific price range but it does not ensure that your order will be executed. Your order may be queued depending on the volume of shares being traded at the nominated price.
Stop Loss orders: Setting a stop loss price allows you to indicate a price at which a sell order is activated and placed on the market. The stop loss order will only be 'triggered' if the share in question trades at the indicated price. You can also specify a limit price, which means once the 'trigger' is activated, the shares will be sold at no less than this limit price. Stop loss orders are aimed at traders who believe that if the price of a particular stock drops to a certain level, the share price will continue to fall. For that reason, the trigger price is always below the current market price.
Target Buy orders: This indicates that a buy order should be activated if a share trades only at the selected price. Setting a target price allows you to indicate a level at which a buy order should be activated and placed on the market. The target order will only be 'triggered' if the share in question trades at the indicated price. A limit price can also be indicated which means once the 'trigger' has been activated, the shares will be purchased at no more than this limit price. The target order facility is aimed at traders who believe that if the price of a stock reaches a certain level, the share price will continue to rise. The trigger price is always above the current market price.
Please note that stop loss, target or limit orders may remain on the market and queued for up to 20 business days including public holidays. For partially completed orders, we charge minimum brokerage on the first part and then if applicable, the outstanding brokerage is charged as the remainder of the order trades.
Find out more information on the different types of share trading orders in our guide.
Check out this video for the simple steps to buy and sell shares through Online Share trading:
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