![]() ![]() If sellers are abundant, the price at which the order is executed might be much lower than $9. To be clear, this does not guarantee that the order will be executed at exactly $9, but it does guarantee that the stock will be sold. So it means the bankrupted delisted down trend stocks are not considered. Survival Bias: My research focuses on index stocks that have long term up trends. In layman's word, 9 in 10 gaps get filled not always, but pretty close. In this case, the investor might place a stop order at $9 so that, when the stock does trade to that level, the order becomes effective as a market order. So what's that mean: when a stock price gap is observed, by a chance of 91.4 it will get filled in the future. For example, suppose an investor wants to sell 1,000 shares of XYZ stock if it trades down to $9. ![]() Stop Order – A stop order goes to work when the stock passes a certain level.For example, if a person were to put in an FOK order to sell 2,000 shares at $10, a buyer would take in all 2,000 shares at that price immediately or refuse the order, in which case it would be canceled. Fill or Kill (FOK) – An FOK order must be filled immediately and in its entirety or not at all.Here is a chart example: In this example, you can see that the stock gapped down. They are talking about a stock that has traded at the price level of a previous gap. If it is not filled that day, the order is canceled. When we say that a stock is 'filling a gap', the Japanese would say that the stock is 'closing the window'. Day Order – A day order is good only for that trading day.The key point an investor using limit orders must keep in mind is that if they are trying to buy, then the asking price, not merely the bid price, must fall to the level of their limit order price, or below, for the order to be filled. If the stock stays below $10 a share, the seller might never be able to unload the stock. Again, the balance of the stock will not be sold unless the shares trade at $10 or above. This means that the stock price opened higher than it closed the day before, thereby leaving a gap. For example, if a company’s earningsare much higher than expected, then the company’s stock may gap up the next day. Then, they might have to wait until another buyer comes along and bids $10 or better to fill the balance of the order. Gaps occur because of underlying fundamental or technical factors. Upon placing such an order, the individual would immediately sell 1,000 shares at the existing offer of $10. Using the above spread example, an individual might place a limit order to sell 2,000 shares at $10. Limit Order – An individual places a limit order to sell or buy a certain amount of stock at a given price or better.If they placed a market order for 2,000 shares, the buyer would get 1,500 shares at $10.25 and 500 shares at the next best offer price, which might be higher than $10.25. By using the example above, if the buyer were to place an order to buy 1,500 shares, the buyer would receive 1,500 shares at the asking price of $10.25. Market Order – A market order can be filled at the market or prevailing price. ![]()
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