Financial Markets Book Financial Markets For The Rest Of Us
An Easy Guide To Money, Bonds, Futures, Stocks, Options, And Mutual Funds
Search the full text of this book:

by Robert Hashemian

Page 108

    a sell stop order at $250 for a few contracts. This means that you believe (based on some technical analysis) that if corn drops to $250 it may even go further down and by taking a short position you would profit from the price drop later on when you settle. The same logic can be applied if the price of the contract is on its way up and you want to cut your losses on a short position (that you have from before) or you want to take advantage of a momentum play by going long and later settle your contracts at a higher price. There are of course no guarantees that your stop strategy will not backfire. For example, as you purchase contracts to take advantage of a seemingly strong upward momentum, the contracts could do an about face and head lower, dragging you into a loss position.
  • Stop limit order - This is the same as a stop order with the exception that your order will execute at your specified price after the contract price reaches the level you have specified. This option is for those who want to place a stop order and who do not want to be at the mercy of the market.
Other Specifications
Some of the following specifications are also used for futures contracts orders:
  • Day / GTC - You can set a time duration for your order. A day order is only good for that day, meaning that if the order cannot be filled for that trading day, it is cancelled. A GTC (Good Till Cancelled, a.k.a. open order) order remains open until the order can be filled, even if it takes weeks. Some brokers, however, may have a policy to kill an unfilled GTC order after a period of time, presuming that the customer might have forgotten about the order.
  • FOK - With Fill Or Kill (FOK) orders, brokers are instructed to make one immediate attempt to fill the order and if it cannot

<< Prev Page   |:::::::::::::::::::::::::|   Next Page >>
Table of Contents
Copyright and Disclaimer
  • If you have enjoyed reading this page, please consider purchasing the book or making a Bitcoin donation 1K9TzBvQ2oaEb4tX9t2vKDtZouMcpfV6QF.
  • Book Chapters
    Table of Contents Copyright and Disclaimer Foreword Money
    Bonds Futures Stocks Options
    Mutual Funds Retirement Final Words Appendix A

    Read Financial Markets  |   Home  |   Blog  |   Web Tools  |   News  |   Articles  |   FAQ  |   About  |   Privacy  |   Contact
    Donate Bitcoin: 1K9TzBvQ2oaEb4tX9t2vKDtZouMcpfV6QF
    paypal.me/rhashemian
    © 2001-2019 Robert Hashemian   Powered by Hashemian.com