Order Types Overview

Ultimate Trader supports the following order types:

• Limit Order (LMT) -  An order placed with a brokerage to buy or sell a predetermined amount of shares at a specified price or better than the specified price. Limit orders also allow an investor to limit the length of time an order can be outstanding before cancelled. For example, if you wanted to buy a stock at $10, you could enter a limit order for this amount. This means that you would not anything above $10 for the particular stock. It is still possible, however, that you may purchase the stock for less than the $10 limit amount.
  Example: XYZ is currently trading at $20. You place a limit order for XYZ at $19. When XYZ falls to (or below) $19, the order will execute.
   

• Good Till Canceled (GTC) - This type of order stays live until it is canceled by the user.
   

• Good Till Day (GTD) - With this order, you can set the final day the order will remain live.
   

• Market Order - This type of order places a buy or sell order at the current market price
  Example: You place a market order for XYZ. The current best offer price is $25.12. The order will execute at $25.12. Due to the high volatility of some stock prices, your order may execute at a slightly different price if the best offer changes while placing the order.
   

• Market on Close (MOC) - A market order to be executed as near to the end of the exchange day as possible.  This is an order entered sometime during the day that grants discretionary power to the trader, so that, as near as possible to the end of the trading day, a market order will be executed.
   

• Stop Market (STP MKT) - An order placed with a broker to sell when a certain price is reached. It is designed to limit an investor's loss on a security position. This is sometimes called a stop market order. For example, setting a stop loss order for 8% below what you bought the stock for would limit your total loss to 8%.
  Example: You purchase XYZ stock at $20 with a stop price of $18. If the price of the stock falls to (or below) $18, a sell order at the market price will be placed to close the position.
   

• Stop Limit (STP LMT) -  An order placed with a broker to buy or sell at a specified price (or better) after a given stop price has been reached or passed. Stop limit orders are used to buy a stock when it reaches a certain price, this allows investors to buy when the stock has upward momentum behind it.
  
  Example: You purchased shares of XYZ stock at $20. The current price is $18. You place a Stop Limit Sell order with a stop price of $16 and a limit price of $15. A limit order for $15 will execute when the current price reaches or passes $15.
   

• Trailing Stop (TRAIL STP) -  A stop-loss order that is set at a percentage level below (for a long position) the market price. The price is adjusted as the price fluctuates.
  
  Example: You place a Trailing Stop with a trailing amount of 3 points when the current price is $20, creating a trigger price of $17. If the price of XYZ increases to $22 (increase of 2 points), the trigger price also increases two points to $19. If the price of XYZ then falls to $21 (decrease of one point) the trigger price remains at $19. If XYZ falls to $19, a market sell order will be placed.
  
  Click here for a visual example of Trailing Stop orders.
  
   

  In this example, stock XYZ is purchased for $15, with a trailing amount of $5, creating an initial trailing price of $10. As the current price increases $5 (to $20) so does the trailing price (to $15). When the current price drops (to $18), the trailing price remains $15. The current price reaches a height of $25 creating a trailing price of $20. When the current price drops $5 from its height to match the trailing price, a market sell order executes to sell the stock

  

• Reserved - This type of order hides your total order size so that you do not pay a higher price because you are buying a large volume of shares. A reserve order appears as a series of smaller orders instead of a single large order. For example, you can place a reserve order to show 1,000 shares and hide your “reserve” amount (true size) of 10,000 shares. After the first 1,000 shares are executed, the order will be replenished until either the entire “reserve” amount (10,000 shares) is filled or the order is cancelled. If a matching order is sent to ARCA, the order will be matched against the entire reserve amount (10,000 shares). Market orders are not accepted, however, reserve orders can be used with discretionary or stop limit orders. Reserve orders can be placed on Instinet and Arca exchanges. Market

• Pegged - This type of order allows you to price orders relative to the current market price for a security. In addition, pegged orders can have a pegging increment, or offset. Offsets allow a client to peg an order with an incremental difference, in 0.01 increments, from the NBBO (National Best Bid and Offer)and can be either positive (higher price) or negative (lower price). The next release of Ultimate Trader will support the setting of offset amounts.
  There are three types of pegged orders:

• PEG BID - (Best Peg) will peg an order to the same side of the NBBO, i.e., a buy order at the bid and a sell order at the offer.

• MID-PEG - will peg an order to the mid-point of the NBBO. The bid or offer will be pegged halfway to the NBBO.

• PEG OFFER - (Market Peg) will peg an order to the opposite side of the NBBO, i.e., a buy order at the offer and a sell order at the bid.
   

• Discretionary - A Discretionary order allows you to enter a hidden price component, known as the discretionary price,  to improve the chances of getting a fill in a fast moving market. The discretionary price must be better than the posted price (higher bid or lower offer). The order will be posted at your initial price and filled at that price if possible. If other orders are posted at a better price, they will be filled first. If the market starts to move and an order comes in above your posted price (but below or at your discretionary price) your order will have the flexibility to move with the market. Discretionary orders can be placed on the ARCA exchange.
  
  A Discretionary order can also be used in an illiquid market. For example, if a stock is showing a bid of 4.00 and an ask of 4.20, you can use a discretionary order to show 4.05 with a discretionary price up to 4.15. If someone comes in at that price you can be filled without changing your order.
  
  A discretionary order is a limit order that includes a discretionary price to expand within a pre-selected price range in which the order is eligible for execution.

• In a Buy order the discretionary amount is added to the limit price.

• In a Sell order the discretionary amount is subtracted from the limit price.

• Non Pro Active - (Post No Preference) The type of order is sent to the ECN without being sent to other market makers and ECNs. The order will reside on the internal book until it is filled. Non Pro Active orders can be placed on ARCA and BRUT exchanges.