AboutPaul Henneman Expertise I can answer any questions on investment strategies. Specifically, my expertise lies in long term investment strategies designed to beat market performance while reducing risk. Not get rich quick schemes, but solid investing strategies.
Experience
Past/Present clients CBSMarketWatch, Hoovers, Multex, Yahoo Finance, Zacks, Earthlink Finance, several large institutions and hedge funds, over 30,000 subscribers to www.ValuEngine.com
The Buy/Sell screen for a typical online brokerage company is as follows:
Enter stock Symbol: Quote:
Transaction:
Quanity:
Order Type:
Duration:
Account Type:
1. If a transaction is for each one of the following: Buy, Sell Short, Buy To Cover, Sell From Portfolio and Sell Not In Account, the order type for each one of these transactions would be which one of the following?
2. Order Type: Market, Limit, Stop, All or None, Fill or Kill
3. The duration for each one of these transactions, as indicated in (1.), would be which one of the following:
Duration: Good Till Canceled or Good For The Day?
4. The Account Type for each one of these transactions, as indicated in (1.), would be which one of the following:
Account Type: Cash, Margin, or Short
The information below may clarify my question: Select the appropriate order type, duration and account type as indicated under each transaction.
Transaction: Buy
Order Type: Market, Limit, Stop, All or None, Fill or Kill
Duration: Good Till Canceled or Good For The Day
Account Type: Cash, Margin, or Short
--------------
Transaction: Sell Short
Order Type: Market, Limit, Stop, All or None, Fill or Kill
Duration: Good Till Canceled or Good For The Day
Account Type: Cash, Margin, or Short
--------------
Transaction: Buy To Cover
Order Type: Market, Limit, Stop, All or None, Fill or Kill
Duration: Good Till Canceled or Good For The Day
Account Type: Cash, Margin, or Short
--------------
Transaction: Sell From Portfolio
Order Type: Market, Limit, Stop, All or None, Fill or Kill
Duration: Good Till Canceled or Good For The Day
Account Type: Cash, Margin, or Short
--------------
Transaction: Sell Not In Account
Order Type: Market, Limit, Stop, All or None, Fill or Kill
Duration: Good Till Canceled or Good For The Day
Account Type: Cash, Margin, or Short
I know that this is a long question. I thank you for any helpful reply.
Answer Thank you for your question! That is a big question, I'll try to provide the most important aspects, please feel free to follow up for more.
It seems that the central part of your question is how to deal with the 'order type' section:
Definition of Market order type: this means that your order will be executed according to current market price for the stock. You have no control over the exact price, but most online brokerages execute the trade immediately, so your purchase price should be no real surprise. Speed of execution and several cents difference should only worry a hard core day trader.
I believe that this is what you will be using. The other options for order type are used to set the price exactly on your order, and for how long your order is good for (if your limits are not reached, how long until the request expires).
For example, with stop settings you can automatically sell a stock if it hits a certain level (up or down).
The complexity of your question is that each of the order types can be used with each duration and transaction type, there is no correct answer as to which order type goes with which transaction.
I hope this gets you started. I'm sure you will have additional questions, I strongly recommend reading about this in depth if you plan to day trade (I do not recommend day trading). If you are simply looking to put in a few trades, perhaps adjust your portfolio a few times a month or less, then you will be almost entirely using the market order type and good till canceled duration. Please follow up at any time if needed.
Sincerely,
Paul Henneman
President
ValuEngine, Inc.
www.ValuEngine.com
