Trading tickets are an important tool to investors and traders alike. A trade ticket is the means through which you place your order. An order could be to buy 3 shares of Disney at market price. In this example, a market order is used. But many different orders exist:
- Market Order
- (Stop) Limit order
- Stop (loss) order
- Trailing stop order
- Algo(rithm) order
- OCO order
If you are new to investing, or a new investor, you can safely ignore the last 3 order types. You will most likely place your orders using the market, limit and stope types.
The trading ticket disected
Below, you can see a capture of a partial trade ticket. Firstly, let's look at the company and market information before we revisit the order types.
On this image, the red numbers represent individual information points.
- This represents the instrument name: The Walt Disney Company
- EQ stands for equity, and refers to the stock product type.
- DIS:xnys USD tells us the ticker (DIS abbreviation unique to each instrument), the exchange abbreviation (XNYS) and the nominated currency of the instruments value (USD).
- Information on cost, trading rates and instrument facts.
- The squares here indicate the instrument is also available as a CFD or stock option (NOTE: InvestingGuides believes true investors avoid these products).
- Bid, Ask and last traded show the expected cost of buying 1 unit of the instrument.
- Net change and percentage change represent the value difference of market open & moment of viewing the instrument (a.k.a in moment day change).
- Open (available for trading) or close (order queued) provides the exchange status.
- Once more the exchange name, but in full: New York Stock Exchange.
The trade ticket of a market order
A market order is one of the most common executed trade tickets. A market order simply means that you aim to buy or sell an instrument at the moment, for the value the market has decided it is worth.
In other words, if the below-market was static and an investor placed a market order for Disney stock, at last, traded price, he/she would receive the stock for 157.83 USD.
In this example no take profit or stop loss has been set. These are considered 'more advanced features and are explained further on. Do note that the selected 3 stocks are pre-calculated to total cost and nominal value (the instrument value), for you to review before placing the order.
Market orders are useful as they guarantee a trade ticket order gets executed, as long as the market is open, and at least someone is willing to sell. If you buy reputable companies that are known and are 'large cap', then this is near guaranteed.
Limit and stop trade tickets
As opposed to a market order, limit and stop orders might be qued. If a trade ticket isn't executed straight away, do not worry. It is part of the mechanic.
If you only wish to buy/sell an instrument at a certain price. Maybe because you believe this is a fair price after evaluating it yourself. Then you would use these order types.
You can also combine this with a take profit or stop loss. This is a common occurrence when you wish to defend a bought instrument from losing too much value.