Basic order types and durations

Learn more about the different basic order types and durations.

When you send an order to buy or sell a security (Stock, ETF, or Option), you’re able to choose from different order types. The type of order you use will determine how it’s sent to the exchange, whether there’s a specific price, and if you have any special conditions. Every order consists of 2 parts: the type, and the duration.

At Questrade, we offer up to 8 different order types depending on the platform you trade with.

With QuestMobile, and Questrade Trading you can choose from either a Market order or a Limit order.

Market order

A market order is the simplest of all order types. It allows you to buy or sell securities at the best available price in the market at the moment your order is sent for execution. During normal trading hours, market orders are usually filled (executed) almost instantly.

Market orders placed outside of trading hours are queued, and will be sent to the exchange at market open the next trading day.

  • If you’re buying, you’ll pay the Ask price (or close to it, depending on volume, and liquidity).
  • If you’re selling, you’ll receive the Bid price (or close to it, depending on volume, and liquidity).

 

Learn more about market orders.

 

Limit order

Limit orders allow you to set a price. You can specify the maximum price you’ll pay when buying securities, or the minimum you’ll accept when selling them. Limit orders will only execute at your given price or better, before the order “expires”.

Learn more about limit orders.

 

Learn more about order durations

Note: Some Market and Limit orders may be subject to ECN fees, learn more about what they are and how to avoid them here.

Questrade Edge

With the Questrade Edge platforms (Web and Desktop), you can also choose from an additional 6 advanced order types:

Ordertype Description
Stop (loss) order

 


A type of order used to buy or sell securities when the market price reaches a specified value, known as the stop price. Stop orders are generally used to limit losses, or to protect profits for a security that has been sold short.
Stop-limit order

 



A stop-limit order combines a stop order with a limit order. With this order type, you enter two price points: a stop price and a limit price.

If the market value of the security reaches your stop price (first price point), it automatically creates a limit order (second price point), as long as it happens within the specified duration time.
Trailing stop order

 



A trailing stop order is a type of order that triggers a market order to buy or sell a security once the market price reaches a specified percentage or dollar trailing amount that is below the peak price for sells or above the lowest price for buys.

Trailing stop-limit order

 



A trailing-stop limit order is a type of order that triggers a limit order to buy or sell a security once the market price reaches a specified dollar trailing amount that is below the peak price for sells or above the lowest price for buys.

Limit on open order

 



When you place a buy order with a limit on open order (LOO), you’re setting the maximum price you’re willing to pay. If the market price at open on the following trading day is at or below the maximum price (limit) you set, your order is processed. If the market price is above the limit you set, your order is cancelled.

Limit on close order

 



When you place a buy order with a limit on close order (LOC), you’re setting the maximum price you’re willing to pay. If the market price at close on the current trading day is at or below the maximum price (limit) you set, your order is processed. If the market price is above the limit you set, your order is cancelled.

Note:Some Market and Limit orders may be subject to ECN fees, learn more about what they are and how to avoid them here.

Clock icon

When you send an order to buy or sell a security (Stock, ETF or Option), you can choose a specific time duration that your order is valid for. Every order consists of 2 parts, the Order Type, and the duration.

The duration determines how long your order will be valid for. If your order has not filled (executed) by the end of the duration, your order is automatically cancelled.

At Questrade, we offer up to 6 different durations for your order, depending on the trading platform of your choice.

With QuestMobile, and Questrade Trading you can choose from either a Day duration, or a ‘GTC’ (Good ‘till cancelled) duration.

Day duration

The order remains active until the end of the current trading day (4pm ET). If the order is not filled by the end of the trading day, the order is automatically cancelled.

If you place a Day order outside of regular trading hours, your order will be queued for the following trading day.

GTC duration

The order remains active until it is filled, or the order is manually cancelled

Please note: The maximum length of time any order can remain active is 90 calendar days. In addition, GTC market orders can only be used with the Questrade Edge platforms.

Questrade Edge

With the Questrade Edge platforms (web and desktop), you can also choose from an additional 4 advanced order durations:

Order duration Description
GTD (Good ‘till date)

The order will remain active until the specified date. If the order is not filled by the chosen date, the order is automatically cancelled.

GTEM (Good ‘till extended market)

The order remains open for the current trading day including both pre- and post-market hours. If the order is not filled by the end of post-market hours, the order is cancelled.

 

Read more about pre and post market trading.
IOC (Immediate or cancel)

All or part of the order will fill immediately. Any portion of the order that is not filled immediately is cancelled. Traders will typically use IOC, or FOK orders (below) to avoid having their order filled across a wide range of prices.
FOK (Fill or kill)

This order will fill immediately, and completely, or not at all. If the order cannot be filled in its entirety, the order is cancelled.

 

An FOK order combines the properties of an All-or-none (AON) order condition and an immediate-or-cancel (IOC) duration. This type of order is typically used for larger orders of many thousands of shares.

A market order is the simplest of the order types. With this order type, you buy or sell a securities at the best available price given in the market at the time the order is sent to the exchange for execution.

If you buy a stock using a market order, you will pay the market’s ask price when you submit your order to the exchange. On the other hand, if you sell a stock using a market order, you will receive the market’s bid price when the order is placed and executed.

Important to know:

  • At times, typically with highly traded securities, the price paid (ask) or received (bid) may be different from the last price quoted before the order was placed
  • If your market order involves buying/selling to different participants, your trade may be filled at more than one price
  • If there are other pending orders that were placed in the exchange before you placed yours, it may take time for your order to process (depending on liquidity of the security and volumes of your trade)

Limit orders allow you to specify the maximum price you’ll pay when buying securities, or the minimum you’ll accept when selling them. Limit orders are filled only if the stock’s market price reaches the limit price you entered within the time frame specified in your duration. While limit orders do not guarantee execution, they can help you set a pre-determined price at which you want to buy or sell securities.

Let’s use some practical examples to make it easy to understand.

As mentioned above, limit orders can be used for either buying or selling securities.

  1. Buy limit order: suppose stock XYZ is trading $20 a share. You’re interested in buying 100 shares of the stock, but you’re not willing to pay more than $19.00 per share for it. While the price is currently trading at $20, you can place a limit order to buy 100 shares at $19.00 or lower now. If, later on, the price drops to $19.00\share within the time frame selected in your duration, the limit order will trigger and execute at $19.00 or lower (given there’s adequate enough supply in the market).
  2. Sell limit order: suppose you own 300 shares of stock XYZ which is currently trading at $49 a share. While you had a great run with XYZ shares, you’re ready to sell the shares if the stock price reaches $50/share. You can automate your trade by placing a limit order to sell your 300 shares at $50 each today, but it will only get executed if the market value of the stock reaches your limit sell price of $50 a share. If there’s adequate enough liquidity, and the value of the shares increases to $50 within your specified duration time, the order will execute and you will receive the proceeds from the sale.

Time component: as mentioned, when you enter a limit order, you’re required to specify your duration. The duration you choose determines the amount of time your order will be active for before expiring.

Important to know:

  • Limit orders are never guaranteed to execute
  • When buying shares using limit orders, your trades get executed when your limit price matches the market’s ask price. When selling, your limit price is executed when it matches the market’s bid price

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