Market orders, limit orders, stop-on-quote orders … what does it all mean? In this episode, I start with the basics of order flow and execution: what happens behind the scenes when you buy or sell stocks and ETFs. Then I go through the various order types, from simple to complex, to help you understand your choices. You’ll get examples of situations where you might use one order type over another.
Section 1: How Securities are Traded
Bid and ask prices
Exchanges and other trading platforms
National Best Bid and Offer (NBBO)
Brokers often get paid for order flow – is that fair or are we getting ripped off?
Section 2: Basic Orders and Conditions
Conditions: All-or-nothing (AON), Fill or Kill, good ’till canceled (GTC), good ’till date (GTD), day orders, market on close (MOC), limit on close (LOC)
Section 3: Complex Orders
One Cancels Other (OCO)
One Cancels All (OCA)
Intro music and mid-program music by audionautix.com