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Placing Stock Trades

     Trading 101
Market Orders
• The simplest and most frequently used order
  type.
• These orders tell the game that you wish to
  purchase the stock at whatever price is at the
  market close (4PM)
• Market orders placed early in the day can be
  “dangerous” because we never know where
  the market for that stock will be at 4PM
SMG Trading Platform
Limit Order
• A buy limit order specifies a price that you are
  willing to pay for a company stock. The order will
  not go through unless it is at or below your limit
  price. “I don’t want to buy XYZ for more than
  $10.”
• A sell limit order specifies a price that you are
  willing to sell the shares for. The order will not go
  through unless you it is at least or above your
  limit price. “I don’t want to sell XYZ for less than
  $14.”
Limit orders require a limit price
Short Sell
• Shorting a stock constitutes a “bet” on the
  downside. You believe the stock will go down so
  you short sell the stock.
• Essentially, you borrow the stock from the SMG,
  and sell it immediately at a price you feel is too
  high.
• When the short sale is executed, the cash from
  the sale is placed into your account.
• You will use that cash later to cover the short
  position and make a profit.
Short Sell




Short
Sell
Short Cover
• You opened a short position by selling a stock short
  (short sell).
• When you close your short position, you enter a short
  cover order. This will return the shares back to the SMG
  (which you borrowed in the first place).
• Essentially, you use the money you got when you
  borrowed the stock from the SMG and sold the stock
  short at a high price.
• For example, you short sell the stock at $10 and then
  short cover at $5… in this scenario you make $5
Short Cover
Questions?

Market, Limit, Buy, Sell, Short Sell,
           Short Cover

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Trading 101 market_limit

  • 1. Placing Stock Trades Trading 101
  • 2. Market Orders • The simplest and most frequently used order type. • These orders tell the game that you wish to purchase the stock at whatever price is at the market close (4PM) • Market orders placed early in the day can be “dangerous” because we never know where the market for that stock will be at 4PM
  • 4. Limit Order • A buy limit order specifies a price that you are willing to pay for a company stock. The order will not go through unless it is at or below your limit price. “I don’t want to buy XYZ for more than $10.” • A sell limit order specifies a price that you are willing to sell the shares for. The order will not go through unless you it is at least or above your limit price. “I don’t want to sell XYZ for less than $14.”
  • 5. Limit orders require a limit price
  • 6. Short Sell • Shorting a stock constitutes a “bet” on the downside. You believe the stock will go down so you short sell the stock. • Essentially, you borrow the stock from the SMG, and sell it immediately at a price you feel is too high. • When the short sale is executed, the cash from the sale is placed into your account. • You will use that cash later to cover the short position and make a profit.
  • 8. Short Cover • You opened a short position by selling a stock short (short sell). • When you close your short position, you enter a short cover order. This will return the shares back to the SMG (which you borrowed in the first place). • Essentially, you use the money you got when you borrowed the stock from the SMG and sold the stock short at a high price. • For example, you short sell the stock at $10 and then short cover at $5… in this scenario you make $5
  • 10. Questions? Market, Limit, Buy, Sell, Short Sell, Short Cover