Question

Remember:

-Buy Limit - Below the market

-Buy Stop - Above the market

-Sell Limit - Above the market

-Sell Stop - Below the market

1) Besides market orders, list two additional ways to enter the market on the long side.

Answer 1

Apart from market order, the other two types of entering the market on the long side are limit order and stop/ stop loss order.

A limit order is a buy or sell order that will only execute at a pre-specified price. The order will not be filled otherwise. The buy limit order is executed at the specified limit price or lower and a sell limit order is executed at the specified limit price or higher.

Stop Order are those which act as triggers for a market order or a limit order after a specified price level is reached. It becomes active only when the specified price level in either direction is reached and functions in a direction opposite to the limit order. A buy stop order is placed above the market price and a sell stop order is placed below the market price. Once the pre-specified price level is reached the order is automatically converted into a limit or market order.