Page 38 - Trading #101 Course – Part One: Trading Basics

TRADING #101 COURSE – PART ONE: TRADING BASICS /2017-10-06

▪ Market to Limit. A Market to Limit order is sent in as a market order
to execute at the current best price. If the entire order does not
immediately execute at the market price, the remainder of the order is
re-submitted as a limit order with the limit price set to the price at which
the original order executed.

▪ Limit If Touched (LIT). Is an order to buy an asset below the market,
or sell an asset above the market, at the defined limit price or better.
This order is held in the system until the trigger price is touched, and is
then submitted as a Limit Order.

▪ One Cancels All Order (OCA). This kind of order is used when the
trader wishes to capitalize on only one of two or more possible trading
possibilities. For instance, the trader may wish to trade stock ABC at
$10.00 or stock XYZ at $20.00. In this case, they would execute an
OCO order composed of two parts: A Limit Order for ABC at $10.00,
and a Limit Order for XYZ at $20.00. If ABC reaches $10.00, ABC’s
Limit Order would be executed, and the XYZ Limit Order would be
canceled.

▪ Basket Order. A group of individual orders that are saved in a single
file and submitted as a package.

▪ Block Order. A large volume Limit Order with a minimum of 50-
contracts.

▪ Volatility Order. A TWS-specific order where the limit price of the
option or combo is calculated as a function of the implied volatility.

▪ Spreads Order. A combination of individual orders (legs) that work
together to create a single trading strategy. You can combine stock,
options and futures legs into a single spread.

Order time limits which affect the time it takes to fill the order:

• Day Order. The most commonly used, this order is in force from the
time the order is submitted to the end of the day’s trading session. For
equity markets, the closing time is defined by the exchange. For the
foreign exchange market, this is until 5:00 pm EST/EDT for all
currencies except NZD.

• Good ‘till Cancelled Order (GTC). This order requires a specific
cancel order to close it out. It can persist indefinitely, although brokers
may set time limits, for example, 90-days.

38 | P a g e