RealStocks Order Types Explained and FAQ
Overview:
- A limit order requires a specified execution price, supports pre-market and after-hours trading, and offers multiple time-in-force options.
- A market order only requires an order quantity for fast execution, but it can only be used during regular trading hours.
- Buy If Touched and Sell If Touched orders automate position entry, take-profit, and stop-loss execution through a specified trigger price.
- Trail to Buy and Trail to Sell orders track stock price movements to dynamically identify potential entry and exit points.
- Order types differ in their available trading sessions, time-in-force options, and use cases. Investors can choose based on their needs.
1. Standard Order Types Explained
1.1 What is a limit order?
A limit order requires investors to specify an execution price. It will only be executed when the market price reaches the specified price or a better price becomes available. A better price means execution below the limit price when buying or above the limit price when selling.
A limit order can effectively control the execution price range and reduce the risk of the actual execution price deviating significantly from expectations. However, if the market price never reaches the limit price, the order will not be executed and the investor may miss a market opportunity.
Available trading sessions: 4:00–20:00 ET, covering pre-market, regular, and after-hours trading.
Supported time-in-force options: Day, Good Till Canceled, and Good Till Date.
1.2 What is a market order?
A market order does not require a specified price; only the order quantity is required. The order is submitted at a price above the prevailing market price to help ensure that it can be fully executed at the market price. Market orders offer fast execution and a high degree of execution certainty, but the exact execution price is not guaranteed.
Available trading sessions: 9:30–16:00 ET. Because liquidity may be limited and price volatility may be higher during pre-market and after-hours trading, market orders are only submitted after the regular trading session opens.
Supported time-in-force option: Day.
1.3 How should I choose between a limit order and a market order?
If price certainty is more important to you, or if you want to trade during pre-market or after-hours sessions, consider using a limit order. If execution speed and execution certainty are more important, consider using a market order during regular trading hours. For less actively traded instruments with wider bid-ask spreads, a limit order may help control execution costs.
2. Conditional Order Types Explained
2.1 What is Buy If Touched?
A Buy If Touched order requires a trigger price, along with the price type, market or limit, the quantity, and other parameters for the buy order the system submits once the market price reaches the trigger price.
Common use cases include opening a position when a stock falls to a desired lower price, buying after the stock breaks above a key price level, and taking profit or stopping loss at a target price when holding a short position.
Supported time-in-force options: Day, Good Till Canceled, and Good Till Date.
2.2 What is Sell If Touched?
Sell If Touched works in the opposite direction from Buy If Touched. It requires a trigger price, along with the price type, quantity, and other parameters for the sell order the system submits once the market price reaches the trigger price.
Common use cases include taking profit or stopping loss at a target price when holding a long position, opening a short position when a stock rises to a higher price, and exiting promptly when the stock falls below a key support level.
Supported time-in-force options: Day, Good Till Canceled, and Good Till Date.
2.3 What is Trail to Buy?
Trail to Buy is a trailing conditional order. It requires the investor to set the amount or percentage by which the stock price must rebound from its lowest point after the order is placed, along with the order price offset, quantity, and other parameters for the buy order the system submits once the price movement triggers the order. The order price equals the market price at the time of the trigger plus the order price offset.
This order can be used to track a declining stock price and identify a potential rebound entry point, or to identify a suitable take-profit or stop-loss level for closing a short position.
Supported time-in-force options: Day, Good Till Canceled, and Good Till Date.
2.4 What is Trail to Sell?
Trail to Sell works in the opposite direction from Trail to Buy. It requires the investor to set the amount or percentage by which the stock price must pull back from its highest point after the order is placed, along with the order price offset, quantity, and other parameters for the sell order the system submits once the price movement triggers the order. The order price equals the market price at the time of the trigger minus the order price offset.
The trigger level can move higher automatically as the stock price rises, helping lock in existing profits without limiting potential gains. It is commonly used to take profit or stop loss on a long position or to identify an opportunity to open a short position.
Supported time-in-force options: Day, Good Till Canceled, and Good Till Date.
3. FAQ
3.1 Is a limit order guaranteed to be executed?
No. Even if the market price reaches your limit price, orders ahead of yours may consume all available quantity at that price. As a result, your order may remain unfilled or may only be partially filled. Limit orders generally follow price-time priority.
3.2 Can I submit a market order during pre-market or after-hours trading?
No, market orders cannot be executed during pre-market or after-hours trading. Because liquidity may be limited and price volatility may be higher during these sessions, market orders are only submitted and executed during regular trading hours from 9:30 to 16:00 ET. If you want to trade during pre-market or after-hours sessions, use a limit order.
3.3 What is the difference between Buy If Touched and a limit order?
A limit order is submitted directly for execution at the limit price or better. With Buy If Touched, the system submits an order only after the market price reaches the trigger price. For example, if you want to buy after a stock breaks above a specific price, use Buy If Touched instead of a limit order.
3.4 Do the trigger prices for Trail to Buy and Trail to Sell change?
Yes. The reference low for Trail to Buy moves lower as the stock price declines, while the reference high for Trail to Sell moves higher as the stock price rises. The order is triggered when the price reverses by the specified amount or percentage.
3.5 What time-in-force options are available for each order type?
Limit orders and all conditional orders support Day, Good Till Canceled, and Good Till Date. Market orders only support Day. Any unfilled portion of a Day order is canceled automatically after the market closes.
3.6 Which order type is suitable for beginner investors?
Beginners are advised to start with limit orders. After becoming familiar with pricing and execution mechanisms, they can gradually use conditional orders such as Buy If Touched, Sell If Touched, Trail to Buy, and Trail to Sell to manage position risk and respond more flexibly to different market conditions.