In order to actually trade on an exchange, you must submit specific orders that inform your broker how trades should be executed. You need to plan your trades in advance. Begin by deciding the underlying asset or commodity you’re trading and the trading position. You’ll also need the amount of contracts and the length of time until the delivery date. You have two major time options to choose between executing for orders: Day orders and Open orders. Day orders expire at the end of the day, while open orders remain open until the trade is completed or canceled. An open order may also be called “Good till Canceled”, but can only be canceled at the directive of the person who ordered.

After you’ve decided between your time options, you’ll choose the order type. These orders control the execution requirements of the trade. Orders may need a desired price at which you want to buy or sell a contract, but other orders will execute automatically at the current price.

Market Order

A Market Order is immediately executed at the current price. This can be an immediate sale or an immediate purchase. Many other options become market orders after certain conditions are met.

Market if Touched Order

A Market if Touched Order is executed when the market reaches the price you specify. A buy order is entered at a price lower than the market. A sell order is entered at a price higher than the market. These orders become market orders at or beyond the specified price. Once the price is reached, the market order is issued. If the price is not reached, nothing occurs.

Market Order on Open/Close

Market Orders can also be specified for certain periods of time in the trading day. A market order on open is executed only during the opening of trading, at the best price available. A Market Order on Close is executed only during the closing of trading, at the best price available. Brokers can choose not to service an order on close, and exchanges may not recognize or service these orders. Both orders may be filled at undesirable prices, time specified supersedes desired price in importance.

Stop Order

A Stop Order takes place when prices reach or pass a specific target level. They come in 2 varieties. A Buy Stop Order is placed above the market, and issues a market order to buy when prices reach the requirement. A Sell Stop Order is placed below the market, and issues an order to sell when prices reach the requirement.

Limit Order

A Limit Order is filled at the requested price or better in both directions. If you’re purchasing, the Limit Order is placed under the market price. If you’re selling, the Limit Order is above the market price. The trade will only occur once the market price passes the limit price. If that never happens, the trade never occurs. There’s no guarantee the trade will occur at this price. It may fill higher, lower, or equal depending on price movement immediately after the order is triggered.

Stop Limit Order

A Stop Limit Order becomes a Limit Order if the specified price is reached. The order is first a Stop Order which buys if above the market, or sells if below the market. It is also a Limit Order which buys below the specified price, or sells above the specified price. The order will be executed only until the limit price. After the limit price no trading will occur.

Stop Close Order

A Stop Close Order is specified only for execution at the close of the trading period if the market price is compatible with the stop price. It will buy if above the market, and sell if below the market. If the price moves quickly, the order may trigger at the specified price but fill at an undesirable value. Movement between the trigger and the fill price can occur.

All or None Order

An All or None order is filled completely or is not filled at all. Similarly, A Fill or Kill order is filled within the first three attempts. If the order can’t be entirely filled, the order is cancelled.

Enter/Other Cancel Order

There are two orders which instruct brokers to cancel a previous or a simultaneous order. A One Cancels the Other Order specifies two orders, with the first successful order eliminating the other. Only one will be filled. An Enter and Cancel order cancels the previous order and replaces it with a desired order. This cannot be used on orders which have been filled or market orders.

Spread Order

A Spread Order takes the long and short position and profits from the difference between the two prices. This difference is known as the spread. The long

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