Got your limit orders ready?
Good, because we’re ready for them.
Our trading platform now allows you to set limit prices on your buy and sell orders, a capability that can come in handy to help you manage risk especially in volatile markets.
Before we get too far, let’s first make sure you know what limit orders are and what they’re good for. If you already know their fine points, go ahead and skip to the below section “Applying limit orders to motifs.”
Limit order basics
Limit orders let you buy or sell a stock at a specified price or better. The specified price is set by you. A buy limit order is filled only when the price is better than the limit price you have set or is below it. A sell limit order is filled only when the price is better than the limit price you have set or is above it. Either way, a limit order is not guaranteed to execute and is filled only if the stock’s market price is better than the set limit price.
While limit orders are not guaranteed to execute, people use them to help guard against paying for more (or selling for less) than the price specified in the limit order. For this reason, many investors find limit orders useful in volatile trading environments or when they are unable to keep an eye on the market.
Applying limit orders to motifs
Here are some ways to apply limit orders to motifs.
- You can place buy or sell limit orders on one or more stocks in the motif you currently own. Use cases include:
- You may place a buy limit order to add a new stock to the motif. For instance, you can set a limit order to buy/add McDonald’s to the Eating Out motif when its share price reaches $110. (Note: This action will work when your owned motif has 29 or fewer stocks, since each motif contains at most 30 stocks).
- You may place a sell limit order to sell a specific position in the motif. For instance, you can set a limit order to sell 50 McDonald’s shares in your owned Eating Out motif when its share price reaches $100.
- In all cases, you can place limit orders on fractional shares. For example, you can set a limit order to buy 0.55 McDonald’s shares when its share price reaches $110. You will get the best market price available real time for fractional shares, just like you do for whole shares.
You can set limit orders to remain open for the following durations:
- 1 Day – choose option “Day”. Your order remains open through the end of the trading day, and then will expire if it does not execute during the trading day. If you place a stop or limit order after market close, the order will carry over to the next trading day.
- 60 Days – choose option “Good ‘Til Canceled”. Your order remains open until your order fills completely, you cancel the order, or 60 calendar days have passed and the order expires.
If you have any questions about this new feature, contact us at firstname.lastname@example.org or 1-855-586-6843, 9:00 am – 6:00 pm ET, Mon-Fri.