There are four major order types when trading stocks and options. You also have the choice to mark your order as good for the day or good until canceled. These terms are defined below:
Market order
An order to buy or sell securities at the current market price. It will be filled immediately during the regular market hours as long as there is a market for the security.
Limit order
An order to buy or sell securities at a specified price. The order will only be filled if the limit price is reached before the order expires.
Stop order
An order either to buy a stock at the market price when the price rises to a certain level, or to sell a stock at the market price when the price falls to a certain level. Stop orders are typically used for protection in the event that a stock drops and the investor wants to cut their losses at a specific price level.
Stop-limit order
A stop-limit order is similar to a stop order however, when the stop price is reached, a limit order is triggered instead of the stock being bought or sold at the current market price. A stop limit or does not guarantee execution when the stop price is reached.
Day order:
An order that expires at the end of the trading day. All orders default to day orders unless they are changed by the customer.
Good-till-canceled (GTC) or open order:
Remains in effect until the order is either filled or canceled.