Most of the time when we order something, such as goods or services, the process is straightforward. We pay for something by using cash, a credit card or check and then we receive it. Ordering a stock can be a little more daunting, however. There are a variety of options and, unlike goods or services, prices perpetually change.
The first type of order is the limit order. A limit order is used when the investor wants to buy or sell a company's stock at a specific price. Using a broker, the investor specifies how many shares he desires to buy or sell and then the exact price at which the sale will take place. The trade will not be carried out unless the security hits the exact price specified in the limit order. If the equity reaches a more favorable price, a lower price for a buyer or higher price for a seller, the trade will still be completed. The advantage to placing a limit order is that the investor knows exactly at what price
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