In stock markets, trades occurs when orders are placed. When one trader places buy order and another trader places sell order at the same price trade occurs.
One can place buy order or sell order in order to enter or exit the trade in stock markets. If some body enters to trade by placing a buy order he can exit from that trade by placing a sell order. If some one enters to a trade by placing a sell order he can exit from that trade by placing a buy order.
For example a security is trading at 500 RS and you place an order for 100 shares, 100 shares of that security would be bought for you at the price of 500 RS per share.
For example if you place an order for 100 shares of a security at 500 RS, which is trading at 550 RS, your order would be executed when the price come down to 500 RS.
For example A security is trading at 100 RS. If you think the price of that security will decline to 80 RS, you can place a buy order at RS 80. Only if the price come down to 80 RS, your trade will be executed.
For example A security is trading at 100 RS. If you think the price of that security will increase to 120 RS, you can place a sell order at RS 120. Only if the price go higher to 120 RS, your trade will be executed.
One can place buy order or sell order in order to enter or exit the trade in stock markets. If some body enters to trade by placing a buy order he can exit from that trade by placing a sell order. If some one enters to a trade by placing a sell order he can exit from that trade by placing a buy order.
Market order
Market order is an order placed with a brokerage to buy or sell shares in the current market place. In market order trader tells the number of shares he or she want to buy or sell. Market order will be executed immediately. If you place a market order to get some shares of a company you will get the shares at a price somewhere between the ask and bid price. In high volume markets, market orders are comparatively safe. Market order guarantee the execution subjected to the liquidity of that scrip, but does not guarantee the price.For example a security is trading at 500 RS and you place an order for 100 shares, 100 shares of that security would be bought for you at the price of 500 RS per share.
Limit Order
Limit order is a conditional order, which can be defined as the order placed to buy when the market price of the stock comes to the limit price you set. Limit orders are some times classified as buy limit orders and sell limit orders. Limit order guarantee the price, but does not guarantee the execution.For example if you place an order for 100 shares of a security at 500 RS, which is trading at 550 RS, your order would be executed when the price come down to 500 RS.
Buy Limit Order
If you think that the price of a security will decrease in short term and then rebound to a higher price you can place an order to buy the security at lower levels.For example A security is trading at 100 RS. If you think the price of that security will decline to 80 RS, you can place a buy order at RS 80. Only if the price come down to 80 RS, your trade will be executed.
Sell Limit Order
If you own a security, and think the price will go higher in short term. Then you can place a sell order at a higher price. If the price reaches that higher level your limit order will be executed.For example A security is trading at 100 RS. If you think the price of that security will increase to 120 RS, you can place a sell order at RS 120. Only if the price go higher to 120 RS, your trade will be executed.
