FRM: Order Types (market, limit, stop, stop-limit)
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- เผยแพร่เมื่อ 11 ก.ค. 2010
- Market order: guaranteed fill, but not price. Limit order: guaranteed "or better" price, but not fill. Stop: After price trigger reached, becomes market. Stop-limit: After price trigger, becomes limit order. For more financial risk management videos visit our website at www.bionicturtle.com!
I'll probably have to watch this video 50million times to try to fully understand the logic of all this, but it's still the best video I've seen yet. Thank you!!!!
Hi Nikkie, LOL, thank you, I recorded it, and I still have to refer to it occasionally because I haven't mastered it. Actually, this weekend I put in my first ever limit order (heretofore I had only used market orders) so i I have yet myself to have found a need to execute a stop (much less a stop-limit) but I'm a conservative investor not a trader so ...
Bionic Turtle and I'm pretty new to the market so I'm just searching for much as I can, specifically this topic. This was so easy for me to understand and trust me I've been searching lol
I'm in the same boat. 😄 Already watched it twice.
They try to make it hard. Many words can be changed to simpler vocabulary. I think it's because they didn't want the public to understand the inner workings of trading.
Agree - have watched quite a number to try to get my head around it and this one helped a lot. Good video, thanks!
This is the best explanation of market, limit, stop and stop-limit that I have seen so far. Thanks a million.
+FKeith Arline You're welcome! We are glad it was helpful!
I finally get Limits and Stops!! I've watched so many vids and never got a real understanding of the distinction between limits and stops. Now I do. Your illustrations really helped. Thanks so much!
Yep. Definitely the clearest explanation I've seen thus far on this. The ambiguity that other videos left on the distinction between a stop and a limit is rather maddening in retrospect. You've got a new subscriber. Thanks for the time that you put into this!
This is the most concise and best explanation I have found. Thank you!
Best Explanation I have seen so far!
Thank you.
It is still confusing for two reasons.
One, it assumes that the price rises on the buy. So people say, why would I buy higher. To show this, the buying need to be shown below the market price. So the buy limit $28. So as the price drops, it reaches $28, the buying executed.
The other problem is that while in most places you are saying it right, the order sent to the market, I think in the first part you say the order will be filled above that price. Unfortunately it will only be filled if someone is willing to buy it or in the case of a buy, if someone is selling it. The market price is the last price but it does not guarantee that it will not turn around as the next buying is not willing to pay that price. I don't know if all this can be shown on one graph.
TD also calls the Stop order, Stop-market order. :)
He should have out the sells on the top of the line and buys on the bottom ;)
Simple video to understand. Thanks
Because it is incorrect in this video. It does not work this. In case of buy stop limit order the stop limit level triggers the order and the price will be lower to buy cheaper than the trigger level in a down-tick. The short version is also vice-versa.
Best explanation so far and beautifully done too, I keep coming back to it, over and over again
Thank for such a kind comment
This is the best explanation of order types that I’ve seen. I have watched more than 10 TH-cam videos on this topic and it still was not clear. This was so straight forward, the words, the great graphics and this great instructor made it all clear. I subscribed !!
Exactly what I came to say!
Wow, Thank-you so much for this video. I've always been confused about buy-limit stop limit...
Probably the clearest explanation I could find for these concepts. Thanks.
This is the first set of trader videos I've stumbled across that's actually helpful with explaining things. From a newbie with the capital to justify this lifestyle, thank you so much.
How has your trading gone? I am a newbie now 😄
Wow! Great graphical explanation 👍👍👍I read and watched these order types elsewhere, but this vid finally helped me grasp the definition.
This was the clearest example i’ve seen of market orders thank you very much. The only thing left that i’m having trouble understanding is trailing stops
Still the best and clearest explanation after all these year. Thank you.
I am a beginner and a lot of time I only use market order to buy stocks. Ihave tried to learn the different among limit, stop, and stop limit. Your explanation is more understanding than others. Now I feel more confident to use these orders.
This is the bestest explanation I’ve ever seen, so far.
Thank you! We are happy to hear that our video was so helpful!
There is an information overload one searches over these topics online. But the key understanding of these concepts are clear when one can really differentiate and compare between each entity. Your explanation about the uncertainty of price with certain orders and how you lock with limit is the best Ive seen so far. The pictorial diagram really helped.
Thanks
This helped me so much, thanks man!
Finally understood this lesson. Your visual graphic helped me a ton. Thank you
bionicturtle, I just wanted to says thanks for covering all these finance topics that are tough to find educational videos on!
Probably the best explanation I’ve found on TH-cam
ugg after countless search this is the so far the best explanation! thank u
@wcoy79 glad you liked it, thanks for your comment! David
Amazing explanation and breakdown! Best video on the subject on TH-cam. Thank you.
Thank you for watching! We appreciate your kind words! :)
Watched a lot of videos, Best explanation till date. Staright to the point and clear
awesome, best crisp way of presentation. one picture and less words of explanation needed.
this is by far the best video explaining those order types
by far the easiest and best explanation on how to buy and sell stocks thay I've seen on the net.
Thanks a lot. Tried everywhere but this one expalins the best and Clear!
Very clear! Thank you! The clearest explanation so far!
OK I think I finally got it. My issue was between limit and stop-limit. Limit's limitation is that the market might not reach or (and more importantly to understand the difference:) can move on super quickly and might not get fulfilled IF the price moved in the wrong direction from THE DESIRED PRICE (simplifying this analogy so it doesn't matter buy or sell side). You had no contingency price in case it moved in the wrong direction. Stop-limit allows you have that contingency price; to build in $35-$37 as a 'buffer', but $35 as the first trigger. The STOP is the signal that your desired price is reached: like a limit order. But you also put in a JUST IN CASE price (almost like a second limit) that is intentionally WORSE than the stop. This is a better guarantee to get it fulfilled than JUST a limit order because if the market moves super quickly in the wrong direction you had a backup worse price.
Beautifully explained. The best I've seen. Thank you.
Great explanation and chart. Thanks
This is the first stop limit video that I grasped. Well done!
Thank you for watching! We are very happy to hear that our video was so helpful!
This actually helped a lot. Thank you!
Awesome! Thanks! The guitar at the end aint bad either! :)
Best video I've seen to explain this- thank you
best explanation of the basic types out there
thanks for the video very clear and concise. To the point.☮️
The best explanation I have seen thus far stop limit vs stop loss.
Thank you for watching! We are very happy to see that our video was so helpful! If you would like to be informed of our newest videos and other risk articles, sign up for our newsletter here: www.bionicturtle.com/blog/.
Excellent video! Very clear and easy to understand. Thanks
Thank you for watching!
thank you, that just saved my life wow
Best explanation I’ve seen yet
Perfect explanation. This should be included to all new brokerage accounts
Thank you for this awesome easy to understand explanation with the graph. :)
You're welcome! Thank you for watching :)
Very clear and perfect way you explained this. Graphical [presentation makes things much easier. Thanks
best esplenation ive seen . right to the point . loved it !!!
Thank you for watching!
wonderfull, even after 10 years this educational video is absolutely usefull, thank you
very informative. Good breakdown of information with an even better delivery. I also enjoyed the grafics and visual aids. Good Job!!
Thank you!
One of the best video explaining this subject
Hey David thanks for the illustration. This has been the best video yet. Maybe it's starting to click because I've watch so many other videos on the same concept but none of them have shown visually all the type and there uses. The only thing your missing is a trailing stop but it was better not to have added it because this videos fantastically described the basics. Thanks
Best explanation I've seen on this. 10 year old video, too.
This explanation is simply fantastic!!! Thank you.
Glad you like it. Frankly, I'm eager to try an update (this was eight years ago), I think I've received some great feedback for improvements (also, I have more experience as an investor now, so i have a bit more context on the purpose of some of these orders). Thanks again
Wait, if it's at $30, why would you want to buy at $35 and sell at $25?
He is talking about a situation when the price rises. Some people buy when the price rises. We like to buy when it falls but it can't be shown on one graph.
I'm assuming these are exaggerated example figures to illustrate his point
Never assume! We want to limit losses. Buy at $30. Stop, or don't buy when price reaches $31. Sell to stop losses (if price goes below $30) at $29. This says we're only comfortable losing $1 below purchase price. Or, sell when price reaches our desired gain of $33 per share. Recap: Scenario #1 has us selling to stop losses at $29. Scenario #2 has us selling when our desired gain is reached.
These mechanisms are vital for the health of your wealth. Not using them risks losses far beyond what was outlined in above video. Stocks do reverse directions without notice. I don't know of many people who can absorb a $5 to $10 loss per share and still be happy. Protect your investment by knowing how to input these safeguards on every stock position.
Yeah, I thought you buy low and sell high not buy high and sell low?
@@samsturmer1659 it's shown this way because he's trying to fit all the possible scenarios in one page.
Very clear!!!! Your chart is so clear ! Thanks alot
Thank you! Great job!
that graphic makes it all clear
Thank you for watching! We are happy to hear that our video was so helpful!
Your Chart Beats all the other explanations. Direct and Clear! and is there a way to get that full chart in one frame?
Thank very much! You explained so clear.
Well done. Great video.
thanks you so much i have watched more than 5 videos i didnt undrstand but your explaination was clear i undrstood now
Man i really needed this tx a ton!
You're welcome! Thank you for watching! :)
Thanks for the information, I am confused, in your example if I am placing an order to BUY wouldn't it be the lower the better for the price to go down, why would I place a stop. How does stop-limit differ from just limit. Thank you again
This helped a lot for the Series 6. Thanks!
Awesome, glad to hear it. Good luck on the exam!
Bionic Turtle any possibility you can make one for calls puts longs and shorts before Monday :)
I did just start a new FRM series (we're 9 into the series), when we get to T3. Hull, there will be quite a bit on options. But it won't be before Monday, lol, we can barely keep up with our paying customers at BT. Thanks!
Certainly a well organized presentation - especially with the visual graphic. Additionally, organizing the presentation into distinct Buy and Sell sides makes everything clear whereas other videos do not do this and thus confusing as to application.
2:05 so price is 30 and you make a stop order to buy at 35, well thank you for explain that to me that way, now i fully understant it and i'm not confused at all!
Confusing names for some of these. For example, a stop market sale could be called a trigger market sale instead, since the specified price will trigger a market sale. The term "stop" is confusing because what actually is stopping? Normally stop means for something to cease, not move, discontinue what it was previously doing... so this is not a good use of the word. The only thing we might be "stopping" is retaining that stock but trigger market sale is (in my opinion), a much better term. In fact since we are not really stopping anything, this could be called a conditional start market sale, since we would be initiating a market sale at some set price.
Many others could have been named better too to help alleviate confusion.
Thank you! Great explanation..
You're welcome! Thank for watching!
Usually you buy around asking price or generally higher than market price because you want to catch the stock on the upside,even if the stock has been going down you want to buy the moment it goes back up as oppose to getting it when its going lower because it could just be nosediving down for a while
Nice chart! Helps a lot!
what determines if you get filled? if you don't, do you just try again?
it depends on the general direction prices are moving in.... if prices are rising when you buy then you want to set a limit above the current market price to "limit" the amount you pay - kinda like a ceiling.
Bravo! Crystal clear explanation ever!
Thank you for watching!
I was so confused before but not anymore :). thanks
You're welcome! Thank you for watching!
Awesome video @Murat Örs. Maybe we are fooling ourselves when looking at un-squared charts.
u the man bro. i'm still kinda iffy on the whole sell at a stop-limit order or stop order though. so stop at 25 sells around 25? so it could sell at 24.50 and 25.50? right depending on what the market price is at that time?
Best explanation I’ve seen on the subject. Love the graphics! So on stop limit, does it mean once he stop triggered, the shares are available at limit price or better and sold right away or we have to wait for the price to drop to limit price to excite? Also, I’m using interactive brokers, why is their default limit price is higher than stop price on a sale order? Thanks
Wonderfully simple. Thank you!
Thank you for watching!
Excellent job explaining this. Thank you.
Hello, first of all, great video! I am new to investing and am a little confused. Why would you want to place a limit order above the market price? I always thought limit orders were the least that you are willing to pay per share?? Not more than what the market price is. Sorry if this is a dumb question, I'm just confused haha
For the stop-limit @ $35 / $37 example, you said that after the price reaches $35, the limit order of $37 is triggered and your order will be filled at a price $37 or better (e.g. 36.90 like you've said in the video). Why wouldn't your order get filled at $35 after the trigger when $35 is better than $37 and $36.90? Would appreciate it if you can clarify this concept for me!
Great question and I wish someone would answer.
Best explanation. Thanks!
Great Video! Very informative and easy to follow.
Simple and easy to understand, thanks.
hello admin, wishing project of good success, more development
This is the best video on this topic
Hi David, great video. Please clarify these 2 things for me: 1 - does the STOP in a STOP-LIMIT , always act as JUST the trigger for the limit ? and 2: what happens to the STOP in a STOP-LIMIT if the LIMIT is not reached at all? ex: i buy stock @ 10 thinking it will go to 100. i set a STOP-LIMIT sell order for stop@ 80 and limit @ 100. If the price never reaches 80, nothing happens; if it reaches 99 but then drops, will it be sold as a market order @ 80, or once it reached 80 it became a limit order but since the price never reached the limit , nothing happens, my order is not filled at all ?? To protect my profit in this case, is only a trailing-stop the solution?
Excellent as usual. I watch all your videos your heuristics are unparallelled... If I may humbly offer a suggestion. It would really stick if you could give a quick example of why an investor would want a limit order, stop limit, etc. Your stuff is great if I am ever going to take a CFA or FRM im buying it hands down!
Just the help I needed! Thanks!
Thank you, best video to explain these actions
Best explanation out there! Thanks a lot
An excellent illustration to learn about orders for beginners. Thanks a lot =)
Awesome video.Love the explanation. Please keep up the good work.
Great tutorial, best I've seen....
Awesome, thx very much
You're welcome! Thank you for watching! :)
Very clear explaination.
THANK U!!!!!!!!!!!!!!!!!!!!!!!
But still enormously informative. I don't care for words as long as they make a topic more conceiveable - and if the easiest way to say it makes it the easiest to understand - who splits hairs.