Hands-On Machine Learning for Algorithmic Trading

Types of orders

Traders can place various types of buy or sell orders. Some orders guarantee immediate execution, while others may state a price threshold or other conditions that trigger execution. Orders are typically valid for the same trading day unless specified otherwise.

A market order guarantees immediate execution of the order upon arrival to the trading venue, at the price that prevails at that moment. In contrast, a limit order only executes if the market price is higher (lower) than the limit for a sell (buy) limit order. A stop order, in turn, only becomes active when the market price rises above (falls below) a specified price for a buy (sell) stop order. A buy stop order can be used to limit losses of short sales. Stop orders ...