Hi anyone, pls help.
1. We can place buy, sell, buy stop, sell stop orders. Can one place also buy limit or sell limit order?
Do I need to pay commission if a limit order is closed? not very sure how to use it. Pls help.
stop order is for stop loss purpose and limit order is for profit taking purpose, correct?
2. is there a way to rollover a trade position of spot-month to next month without realizing the profit/loss?
if yes, how to tell the FBR/dealer representative?
I'll use buy side for example....
-if you say 'buy' to the broker meaning you are buy at current BID price or lower than current price--in que...if you are in que to buy, you may not get your buy order filled...your buyorder will get filled at your number (or better ..when many sellers sell....meaning you'll autobuy at lower price..we want to buy cheap..right ?)..but your buy will never filled at higher price..so in this case your buy order is same as buylimit order...not exceeding your 'limit' ...
-'buy at market' is buy at current seller OFFER- this one guaranteed executed immediately. (Market order is the KING of order...but if you are wrong..the order became kOnG order...i prefer this type of order...but new comer pls use normal buy/limit order)
- 'buy stop' is buy at higher number than current price. You can use 'buy stop' to enter market.... especially if your style is a breakout trader..eg if price exceed 900 then YOU (not the market) are sure it will go to 920 etc (trend is BULL -example).. so your buy stop is 900 when current BID price is lower than 900...At other hand 'Sell stop' is sell at lower price than current price. If you want sell at higher price (natural seller want high price..right ?) dont use sell- stop order to enter market...
- another version of stop order... is stop limit eg buy stop xxx limit xxx , which stop < limit or sell stop xxx limit xxx, which stop > limit.
So, you'll see... for a buy order...
very big difference if you say buy or buy stop limit.
big difference if you say buy or buy stop
Little difference if you say buy or buy market
Nearly no difference if you say buy or buy limit
Stop limit order is quite risky if used to EXIT volatile market, as the price may exceed the limit. This risk has been described by both Max and Doom.
So use stop limit only to ENTER market, either buy stop xxx limit xxx or sell stop xxx limit xxx. To exit in volatile market, you still can use 'stop limit' to exit but your risk for MISSED ORDER is high. Many brokers warn use of STOP LIMIT order, more so if you want to EXIT from LOSING POSITION. To exit you better use normal order or market order. If you use stop-order or stop limit to exit, your order MAY become irrelevant depending on current price...I once said to broker to buy stop to close my short sell, but my broker the order is irrelevant
SO THE TYPE ORDERS ALSO DEPENDING ON IF YOU WANT TO ENTER OR EXIT.
1) you have to check the risk. Exit is riskier than entry. Normally you can control the entry, but you cant control the 'outcome'
2) you have to check the relevant situation.
Dont confuse stop order with STOP_LOSS . STOP-LOSS ORDER IS A MISNOMER (in computer system, no such order called stop-loss...buy stop yes, sell stop yes)... If you are shorting (SELL first), any buy or buy limit could be your stop-loss when YOU are LOSING MONEY
SO STOP ORDER IS USED NOT BECAUSE YOU ARE AT LOSS, AND STOP LIMIT ORDER IS USED NOT BECAUSE YOU ARE AT PROFIT. ITS NOT THE ORDER, BUT position (BUY -LONG-BULL or SELL -SHORT- BEAR) OF YOUR ORDER (with some preparation or luck or both) WILL MAKE OR LOSS MONEY FOR YOU.
If you confuse, always ASK your broker, as different broker/market use COULD USE different terms.
2) EVERY EXECUTED opening or closing order has a comission to pay. Just placing 'order-on-board' is free of charge.
Roll-over is only a term in theory, this one also a MISNOMER.... According to my previous FKLI broker, your position in EXPIRING MONTH at the end of month 30th, 31st for FKLI, will be closed automatically if you let it and you will be paid settlement. You may called your broker to close it manually, and you may open new position one in the consecutive NEXT COMING month. If you are short, then you continue to short..or you may change your mind to long...up to you. So you see, the one that ROLL OVER IS YOU, not your contract.
Definately has to pay comission. LOSS or PROFIT depending on your POSITION. Wrong position meaning you are at loss.
