Microsoft PowerPoint - PoF.ppt

Types of tradesƒ 18

Classification on the basis of the

execution price

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Market order:

executed at the best available price

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Limit order:

executed at a price at least as advantageous as a

stated price (if the trade can’t be

completed at that price, it is

delayed until it is possible to

execute it under those conditions)

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Stop loss order:

sell if the price falls to a specified level

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Classification on the basis of

allowable time for

completion

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Good until canceled:

remains indefinitely

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Good until date:

remains valid until a prespecified date

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Good for day / day order:

must be executed by the end or the

day or it is canceled

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Fill or kill order:

must be executed immedi

ately or it is canceled

Single-period random cash flows: Stocks