Lombard Trading Service
Q: I am new to trading stocks, and I was wondering if anyone can tell me how to use the LIMIT and STOP LIMIT variables on the Trading Form and what they mean.
A:
If you were to be trading USRX ( U.S. Robotics), as an example, and you
wanted to buy it for 149 or less, you would issue a limit order to buy
at 149. The broker would have to fill the order at 149 or less. If
you then wanted to protect yourself against loss if the stock dropped
to below 140, you could issue a stop limit sell order at 13
With the stop limit, if the market hit 139 3/4, your order would be
automatically placed as a market order.
A lot of brokers will not take stop limit orders on Nasdaq or ASE
stocks. Since the NYSE accepts them, you should be able to enter stop
limits there with any broker.
Sure, refering to the Lombard on-line glossary...
Limit Order - Order placed to buy at a specified price below the market
price. Order placed to sell at a specified price above the market price.
Stop Limit Order - A stop order, (buy or sell), that becomes a limit
order once the stop order
is activated.
Stop Order (Buy) - An order to buy a stock at the market when the price
increases to a
specified level.
Stop Order (Sell) - An order to sell a stock at the market when the
price falls to a specified
level.