Different Types of Trading Orders

Day and GTC orders, limit orders and stop-loss orders are different types of orders you can place in the Financial Markets. Orders are canceled when they are executed or at the end of a specific time period. Day orders are canceled if they are not executed before the close of business on the same day they were placed. You can also leave a specific time period open when you place an order. This type of order is called a GTC order (good 'til cancelled) and has no specific expiration date.

Limit orders guarantee you will not sell a stock for less than the limit price or buy for more than the limit price as long as the order is executed. It doesn't mean you ever have to buy or sell, but if you do, you are guaranteed that price or more.

Stop-loss orders are designed to stop a loss. If you've bought a particular stock and are concerned that it will fall too low, you might place a stop-loss sell order at $30 to sell that stock when the price hits $30. If the next trade after it hits $30 is 29 1/2, then you would sell at 29 1/2. Essentially the stop loss sell turns into a market order as soon as the exchange price hits that number.