Stop Limit On Quote Vs Stop On Quote Etrade
When it comes to trading stocks, there are many different types of orders that you can use to buy and sell shares. Two of the most commonly used order types on Etrade are stop limit on quote and stop on quote. In this article, we'll take a closer look at what these orders are, how they work, and the differences between them.
What is a Stop Limit on Quote Order?
A stop limit on quote order is an order that combines both a stop order and a limit order. With this type of order, you set a stop price and a limit price. When the stock reaches your stop price, the order is activated and becomes a limit order. This means that your shares will only be sold if the price reaches your limit price or higher. This can be useful if you want to sell your shares at a specific price, but only if the price reaches a certain level first.
What is a Stop on Quote Order?
A stop on quote order is a type of order that is triggered when a stock reaches a certain price. With this type of order, you set a stop price. When the stock reaches your stop price, the order is activated and becomes a market order. This means that your shares will be sold at the best available price at that time. This can be useful if you want to sell your shares quickly, without waiting for a specific price.
The Differences Between Stop Limit on Quote and Stop on Quote Orders
The main difference between stop limit on quote and stop on quote orders is the way they are executed. With a stop limit on quote order, your shares will only be sold if the price reaches your limit price or higher. With a stop on quote order, your shares will be sold at the best available price at that time. This means that with a stop limit on quote order, you may not sell your shares if the price doesn't reach your limit price. With a stop on quote order, you may sell your shares for less than your desired price, but you will sell them quickly.
When to Use Stop Limit on Quote and Stop on Quote Orders
Both stop limit on quote and stop on quote orders can be useful in different trading scenarios. Stop limit on quote orders are useful if you want to sell your shares at a specific price, but only if the price reaches a certain level first. This can be useful if you want to maximize your profits, but don't want to risk selling your shares for less than you think they're worth. Stop on quote orders are useful if you want to sell your shares quickly, without waiting for a specific price. This can be useful if you need to raise cash quickly, or if you're concerned about a sudden drop in the stock price.
Conclusion
Stop limit on quote and stop on quote orders are two of the most commonly used order types on Etrade. While they have some similarities, they also have some important differences. Understanding these differences can help you make more informed trading decisions and maximize your profits.