In investing circles, an order entry is the process of recording the placement of an order or transaction by a broker, on behalf of an investor. There are a number of different types of order entries in use today, with each term designating a slightly different approach to executing the order. Most forms of the entry order allow investors to stop the process and effectively rescind the order, as long as that transaction has not proceeded past a certain point.
One of the more common examples of an entry order is the market order. This type of transaction calls for the broker to buy or sell stock immediately, regardless of the current market price. Considered the most basic of all types of orders, many brokerages charge smaller fees for a market order, simply because it is a simple and straightforward order to execute.
A limit order is another common form of order entry. With limit orders, investors instruct brokers to buy or sell when a stock increases to a certain price per share. This order remains in effect until the stock reaches that price. At that point, the broker executes the order, without the need to consult the investor beforehand. An order of this type is often more expensive than a market order, since it is somewhat more labor intensive for the brokerage.
A stop order, also known as a stop loss order, is much like a limit order in reverse. In the event that a stock drops to the price identified by the investor, the broker will automatically execute an order for the number of shares specified. This type of order entry can be especially helpful when it comes to selling stocks that have begun to decline, but are still worth more than the original investment.
The good till canceled order is a type of order entry that is structured to remain active until the investor informs the broker to stop or kill the order. This can be used in conjunction with other types of orders, effectively establishing a window of time for the activity to take place. It differs from a day order, which is a form of order entry that authorizes the broker to initiate a transaction during the current trading day only.
The all or none order is an order entry that essentially requires that the transaction meet all criteria established by the investor before it can be executed. For example, the investor may not want to move forward with the purchase of a given stock until a minimum number of shares are available. The broker will hold the order until the required number of shares can be acquired, then take steps to secure the shares on behalf of the client.
