There are many different types of stock orders. Some orders are simple and basic, others are complex. Often the same type of complex order is called different names by different brokers.

At Insight Stock Picks we generally use just 3 types of orders. The three types of orders are universally considered the three basic types of orders. If we ever use a type of order that is not on this list, it will be explained fully in our daily alert.
Our three basic order types are:

1. Market Orders
2. Limit Orders
3. Stop Orders

Stop Orders:

A stop limit order has a specific price that the buyer wants the stock to trade at before the order is executed. Stop orders are either buy stop orders or sell stop orders.

Buy Stop Order: A buy stop order is an order to buy a stock once a certain price had been reached. For instance, if you want to buy a stock but only after it reaches a new high for the day, you would enter a buy stop order at a price just above the stock's high.

Example: A stock has traded as high as $10.00. You only want to buy the stock if the price rises above that price. You would enter a buy stop at $10.10. You would be filled if the price of the stock reaches $10.10, but would not be filled if the price stays below the $10.10 price.

Sell Stop Order: A sell stop order is just the opposite. You want to sell a stock but only if the stocks price falls sigificantly below the current level.

Example: A stock is trading at $10.00 and you believe it will continue higher. However to protect yourself if you are wrong in your analysis, you enter a sell stop at $9.50. If the price falls to the $9.50 level, your stock will be sold.

Next Topic Types of Stock orders: Order Instructions