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Types Of Stock Trading In The Market


What is order?

Trading in the stock market has become easy for investors today. In the age of the internet, you can trade your stocks online, in the comfort of your home. Similar to online shopping, you can now place an order for buying or selling stocks. That is called order. Therefore, an order is an instruction given by you—either to your broker or the trading portal. It is the method through which you execute buying and selling your stocks.


It is imperative to know the basic types of order in the stock market. Knowing the types will allow you to make a well-informed decision about your investment. It will also help you to learn more about the market. It is a guided technique on when and how to place orders in the stock market. If you wish to invest in the stock market, it is essential that you first know about the basic types of orders available. Here are some of the basic types of orders you should know.

·  Market Order:

Market order allows you to buy or sells shares immediately. It buys or sells shares at the current price of the market. It gets executed at a current near bid, which is the best available price.

·  Limit Order:

Limit order allows you to set a pre-determined price. Thus, you can fix an exact “limit” to your order. It is the limit at which you can buy or sell your shares. Unlike market order, the execution is not immediate. It is executed only when it reaches the fixed limit.

Watch video: https://www.icicidirect.com/knowledgecenter/video/equity/market-order-vs-limit-order

·  Stop Loss Order:

Stop Loss order allows you to reduce your losses, especially in day trading. It sets a limit at which you can stop your loss. The market keeps changing daily, which may result in heavy losses. Thus, by setting up a stop loss to your order, you can exit the position when you’ve reached the specified limit to avoid incurring heavy losses.

However, these are just the three basic types of stock orders in the market. There are a few others you should know:

·  After Market Order (AMO):

After Market Order allows you to trade after the market hours when it is closed. All you need to do is place your order at the share price you wish to buy or sell. It will automatically get executed at the market hours. This type of order is suitable if you do not have time to trade during market hours.

·  Cover Order (CO):

Cover Order allows you to trade two orders at the same time. You can place a market order along with a stop-loss order.

·  Good till Cancelled Order (GTC):

Good till Cancelled Order allows you to trade until it gets fulfilled or cancelled. You can also set an expiry period for the period of execution.

·  Immediate or Cancel Order (IOC):

Immediate or cancel order allows you to execute your trade immediately or else it gets cancelled. IOC may result in partial execution. At such times, your remaining order will stand cancelled.

·  Bracket Order (BO):

Bracket Order allows you to trade in 3 orders. It comprises three order types: a buy/sell order, a target order, or a stop-loss order.  Thus, you can place a bracket order of buying at Rs 50, a target to sell at Rs. 100 and then set a stop loss at Rs. 40.


Stock trading is inherently risky. Knowing about the order types in the stock market will help you decide which order is best suitable for you. With it, you can minimize losses and achieve the trading price as desired. Based on your time frame, investment goals, and risk-taking capacity, you must trade your shares in the market.


ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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