What kinds of stock orders are there in Singapore?

In Singapore, investors can use several types of stock orders to buy and sell shares when stock trading. Each order type has its benefits and risks, so it’s essential to understand the differences before placing an order. In this article, we’ll look at Singapore’s most common stock orders and explain what they mean for investors.

Types of stock orders

Here are the most common stock orders in Singapore:

Market order

It’s an order to buy or sell shares at the current market price. This type of order is the simplest and most common type of stock order. For example, if you wanted to buy ten shares of Company XYZ at the current market price of $5 per share, you would place a market order. The benefits of a market order are that it’s quick and easy to execute. The downside is that you may not always get the price you want, as the market price can change rapidly.

Limit order

Limit orders are the most common type of stock order in Singapore. It’s an order to buy/sell shares at a specified price, known as the limit price. For example, if you want to buy shares of Company XYZ at $5 per share, you would place a limit buy order at $5. If the shares of Company XYZ are trading at $5 or lower, your order will be filled. However, your order will not be filled if the shares are trading above $5.

Stop-loss order

A stop-loss order is an order to sell shares at a specified price, known as the stop price. A stop-loss order becomes a market order when the stop price is reached. For example, if you own Company XYZ shares and want to sell them if they fall to $5 per share, you would place a stop-loss order at $5. If the shares of Company XYZ fall to $5, your order will be converted to a market order and sold at the current market price.

Trailing stop

It is an order to sell shares at a specified price, known as the trailing stop price. The trailing stop price is set at a certain percentage below the current market price. For example, if you own company XYZ shares and want to sell them if they fall by 10%, you would place a trailing stop at 10%. If the shares of Company XYZ fall by 10%, your order will be converted to a market order and sold at the current market price.

Good-till-cancelled (GTC) order

A good-till-cancelled (GTC) order is an order that remains in effect until it is executed or cancelled. GTC orders are often used for limit orders and stop-loss orders. For example, if you want to buy shares of Company XYZ at $5 per share, you could place a GTC limit buy order at $5.

One cancels the other (OCO) order

One cancels the other (OCO) order is two orders that are linked together. If one order is executed, the other order is automatically cancelled. OCO orders are often used for stop-loss orders and trailing stop orders. For example, if you want to sell shares of Company XYZ if they fall to $5 per share or rise to $10 per share, you could place an OCO stop-loss order at $5, and a limit sell order at $10.

The benefits and drawbacks of stock orders?

The main benefit of stock orders is that they can help you manage your risk. For example, if you’re worried about a stock falling in price, you could place a stop-loss order to sell your shares if the price falls below a certain level. This order can help you limit losses if the stock price falls.

Another benefit of stock orders is that they can help you take advantage of market fluctuations. For example, if you think a stock is going to rise in price, you could place a limit buy order at a lower price. If the stock price rises, you’ll be able to buy the shares at the lower price and sell them at the higher market price. This order can help you make money if the stock price increases.

The main downside of stock orders is that they can be tricky to execute. If you’re not careful, you could end up paying more for a stock than you wanted or selling it for less than it’s worth. That’s why it’s crucial to understand how stock orders work before you place one.

In conclusion

In conclusion, stock orders can be a helpful tool for investors and help you manage your risk and take advantage of market fluctuations. However, stock orders can be tricky to execute, so it’s essential to understand how they work before you place one. Even experienced investors can make mistakes when placing stock orders, so it’s essential to be careful.