FINRA published an alert for retail investors concerning different order types used for buying or selling securities. The investor alert contains descriptions of common order types (e.g., Market Orders, Limit Orders and Stop Orders), as well as more complex order types with time restrictions and other conditions (e.g., Stop-Limit, Fill-or-Kill, and Immediate or Cancel). It also offers tips and contextual advice for using the various order types.
FINRA urged investors to: (i) ask their firms for the procedures used for executing securities transactions under various order types; (ii) remember that order types with automatic triggers may have unintended tax consequences; and (iii) keep in mind that market and investment risks cannot be eliminated completely no matter which kinds of orders are chosen by investors.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
