Order types on exchange

1. Market order

A Market Order is a buy or sell order to be executed immediately at the best available current market price. Market orders are often used when the certainty of execution is prioritized over the price at which the order executes. When placing this order, the trader prefers the trade to happen immediately at the current price.

2. Fill Or Kill

Defines the lifetime of the order such that the submitted quantity will either execute in fill immediately, or the entire order will be canceled. Also known as “All or None” (AON). This type of order is usually used for a large quantity. The order must be filled in its entirety or canceled (killed).

3. IOC (Immediate Or Cancel)

An IOC order requires all or part quantity of the order to be executed immediately, and any unfilled parts of the order are cancelled. Partial fills accepted with this type of order, unlike a fill or kill order, which must be filled immediately in its entirety or be canceled. The IOC orders might be used when a large order is submitted to the market. To avoid having a large order filled at a wide variety of prices, an IOC automatically cancels any part or the order that does not fill immediately.

4. Limit order

A limit order is an order placed to buy or sell at a specified price or better; because a limit order is not a market order, it may not be executed if the price set by the trader cannot be met during the period of time in which the order is left open. Limit orders also allow a trader to limit the length of time an order can be outstanding before being canceled. After placing the limit order becomes to market depth as a bid price (for “buy limit” orders) or as an ask price (for “sell limit” orders) and could be filled by opposite order from different market participant.

  • Example: If the current market price is 120 and I want to buy lower than that at 119, then I would place a limit buy order at 119. If the market reaches 119 and a seller’s ask matches with the limit order price, the limit order would be executed at 119. If the volume of the opposite order (volume of ask price) is equal to or higher than the volume of the limit order the limit order would be filled, in other case the limit order would get a partial fill.

Stop Orders

A stop order is an order to buy or sell that becomes active only after a specified price level (the “stop level”) has been reached. Stop orders work in the opposite direction as limit orders: A buy stop order is placed above the market, and a sell stop order is placed below the market. Once the stop level has been reached, the order is automatically converted to a market or limit order (depending on the type of order was specified). In this sense, a stop order acts as a trigger for the market or limit order.

5. Stop Market

Once the stop level has been reached, the stop order is automatically converted to a market order.

  • Example: If the current market price is 120, a trader might want to sell if the price reaches 115. A “sell stop-market” order at 115 will be used in this case. If the Best Bid price reaches 115, the “sell stop-market” order would be automatically converted to “Sell Market” order and would filled by the current market price.
    If the trader wants to buy above the current price he would use a “buy stop-market” order. If the Best Ask price reaches an order price level, the “buy stop-market” order would be automatically converted to “Buy Market” order and would filled by the current market price.

6. Stop Limit

Once the stop of a stop limit order is triggered, the limit order is automatically added to the book with price of limit level. If the market price does not reach the stop price, the order will not be triggered and will remain unfilled. If the stop is triggered and the limit order is placed, but the market price does not reach the limit price, the order will also go unfilled. If the market price is moving quickly enough and gaps above the limit price, there may not be enough matching bids or offers available between your stop and limit to fulfill the order.

  • Example: If a trader would like to buy once the market price reaches 120, but not pay more than 122, then a stop price of 120 and limit price of 122 will be specified at the same time using a stop limit order. If the market price reaches 120, the order is triggered and will match the best available asks up to 122. If the market price moves to 122.01 or above, then the order may go partially unfilled due to the limit price.

Trailing Stop Orders

A trailing stop order is a stop order that can be set at a defined amount away from a current market price. A trader places a trailing stop for selling below the current market price; for buying, it sets above the current price. A trailing stop orders are designed to protect gains by enabling a trade to remain open and continue to profit as long as the price is moving in the trader’s favor but closes the trade if the price changes direction by a specified amount.

7. Trailing Stop Market

A stop market order that can be set at a defined amount away from the current market price. A trailing stop for a long position would be set below the current market price. For a short position, it would be set above the current price. A trailing stop is designed to protect gains by enabling a trade to remain open and continue to profit as long as the price is moving in the right direction, but closing the position if the price changes direction by a specified amount. Once the stop is triggered, the trailing stop market order is automatically entered as a market order.

  • Example: If the trader is in a long position (he bought an active and waiting for higher price to sell it) and the current market price is 120 points after a quick rise from 95 points, a trader can set a trailing stop with a price distance of 5 points. This will create a sell stop market order at 115. As opposed to a normal stop order, if the market price continues rising up to 145, then the trailing stop price would rise accordingly, always staying 5 points behind the market price, rising up to 140 in this example.
    The stop price trails behind the market price by the amount specified as price distance and allows for a stop to adjust to the market if the market moves in a profitable direction. If the stop is triggered, a market order would be placed.

8. Trailing Stop Limit

A stop limit order that can be set at a defined amount away from the current market price. The limit price can also be set at a defined amount away from the stop price. A trailing stop for a long position would be set below the current market price; for a short position, it would be set above the current price. A trailing stop is designed to protect gains by enabling a trade to remain open and continue to profit as long as the price is moving in the right direction, but closing the trade if the price changes direction by a specified amount. Once the stop is triggered, the trailing stop limit order is automatically entered as a limit order.

  • Example: A trailing stop limit order is designed to allow a trader to specify a limit on the maximum possible loss. A Sell trailing stop limit moves with the market price, when it goes up, and continually recalculates the stop trigger price at a fixed distance below the market price, based on the user-defined “trailing” points. The limit order price is also continually recalculated based on the limit offset. As the market price rises, both the stop price and the limit price are rising by the trail points and limit offset respectively, but if the price falls, the stop price remains unchanged, and when the stop price hits a limit order will be submitted at the last calculated limit price. A Buy trailing stop limit order is the mirror of the sell trailing stop limit, and has generally used on falling markets.

9. Reserve (Iceberg)

A order where the size is not displayed. Orders with no displayed liquidity are referred to as “Hidden Orders.” Orders wherein displayed liquidity is greater than zero, but less than that of the full order size, are referred to as “Iceberg Orders”. Reserve orders are large single orders that have been divided into smaller limit orders, for the purpose of hiding the actual order quantity. The Reserve attribute, applied through the Display Quantity field, provides a way to submit large volume orders to the market in increments while publicly displaying only a specified portion of the total order size.