Before placing a stock or ETF trade, it’s important to understand the basic terms and tools involved. Knowing how order types work, how long orders remain open, and how settlement functions makes the entire process smoother and reduces the risk of mistakes. Once these concepts are clear, placing a trade becomes a straightforward step-by-step process.
1. Understanding Order Types
Every trade begins by choosing an order type. This determines how your order interacts with the market and what price you may receive.
Market Orders
A market order executes as quickly as possible at the next available price.
It is the fastest and simplest option, but the final price is not guaranteed. If the market moves quickly, your trade may execute at a slightly higher or lower price than expected.
Limit Orders
A limit order gives you control over the maximum price you’re willing to pay when buying or the minimum price you’re willing to accept when selling.
Limit orders offer price protection but do not guarantee the trade will go through. If the market never reaches your limit level, the order remains unfilled.
Understanding the difference between speed (market orders) and price control (limit orders) is essential when deciding which approach fits your strategy.
2. Time-in-Force Settings
Time in force determines how long your order remains active before it cancels or executes. Choosing the right duration ensures your order behaves as expected.
Day Orders
A day order lasts only for the current trading day. If it doesn’t execute by the market close, it expires automatically.
Good-Til-Canceled (GTC)
A GTC order remains active until it is filled or manually canceled. This is useful when waiting for a specific price, though it requires periodic review to ensure it still aligns with your plan.
Time-in-force settings keep your trading strategy aligned with your timeline and prevent orders from lingering longer than intended.
3. How Settlement Works
When you buy or sell a stock or ETF, the transaction doesn’t finalize instantly.
Settlement refers to when the money and shares officially exchange hands. For most stocks and ETFs, settlement occurs one business day after the trade.
This matters when planning additional trades or withdrawals, because unsettled funds typically cannot be reused immediately.
4. Step-by-Step: How to Place a Trade
The document explains the trade placement process visually across several screenshots. Below is the simplified version of those steps, written in clear and actionable terms.
Step 1: Access the Trading Page
Begin by navigating to the trading section of your brokerage account. Select the account you want to use for the transaction.
Step 2: Look Up the Symbol
Enter the stock or ETF symbol into the search field.
As shown in the images from page 3, the interface displays matching results and helps confirm you’ve selected the correct asset.
Step 3: Choose Buy or Sell
Select whether you are purchasing shares or selling existing ones. This sets the direction of your trade.
Step 4: Enter the Quantity
Specify how many shares you want to buy or sell.
The example on page 4 shows a quantity field where the user enters “2,” but your number will depend on your plan and budget.
Step 5: Select an Order Type
Choose between market, limit, or any advanced order types your platform offers.
The dropdown menu illustrated on page 4 includes multiple options, emphasizing the range of choices available.
Step 6: Select Time in Force
Decide how long the order should remain active: for the day or until canceled.
Step 7: Preview the Order
Before sending the order, review all the details.
The preview screen shown on page 5 lists the account, symbol, action, quantity, order type, and estimated value. This step helps catch errors before the order is submitted.
Step 8: Place the Order
If everything looks correct, confirm the trade.
Once submitted, the system processes your order based on your settings and market conditions.
5. Final Notes for New Traders
Placing a trade becomes much easier once you understand these core elements. Order types shape the execution price, time-in-force controls how long the order stays active, and settlement determines when your funds become available again.
With these basics in place, you can approach each trade with confidence and clarity.
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