investing in stocks

TRADING STOCKS - limit, stop, limit-stop orders.?

1) I buy ABC inc. at $1.00 and the market price is now at $2.00. I want to place an order to sell the stock if the market price ever drops to $1.50. Do I set a limit sell order, a stop sell order, or a limit-stop sell order? If I want to set an order to sell when it reaches $3, do I set a limit sell order, a stop sell order, or a limit-stop sell order? Please give numerical examples for both cases. Thanks in advance.!!!
Thanks! This is all hypothetical...what I really want to know is what the difference is between limit, stop, and stop-limit orders with numerical examples so I can follow. along.

For protection against loss, you are using either a Stop Loss Order, or a Stop Limit Order.

A stop loss order at $1.50 will become a market order to sell when the stock trades at $1.50. If you know the definition of a market order, it means the stock could sell at ANY price.

What Does Market Order Mean?
An order to buy or sell a stock immediately at the best available current price.

A market order is sometimes referred to as an "unrestricted order".

Investopedia explains Market Order
A market order guarantees execution, and it often has low commissions due to the minimal work brokers need to do. Be wary of using market orders on stocks with a low average daily volume: in such market conditions the ask price can be a lot higher than the current market price (resulting in a large spread). In other words, you may end up paying a whole lot more than you originally anticipated! It is much safer to use a market order on high-volume stocks.

If the market is orderly, you should execute close to that price. But if the market is falling very fast, or there is little liquidity, like in many penny stocks, you never know what price you'll get. In the Flash Crash, you might have gotten out at $1.00 or less. This is why some people put a limit on their stop order, say at $1.40 so that when the market order executes, it won't trade below that amount. This is called a Stop Limit Order. But it won't get you out if the bottom falls out. If you just want out, you can't use the Limit. The only resolution is to trade high liquidity stocks, not penny stocks.

For your target price of $3, you would use a Sell Limit Order to sell at $3. You're saying that you want to sell the stock for $3 or better. If the stock price is rip-roaring higher or gaps up at the open, the order might execute at $4 or higher.

To help clarify, if you incorrectly set a Buy Stop at $3 for your target price, you are saying that you are willing to buy the stock at $3 or better, and it would execute immediately at the current price, which is better (below) $3; you would sell immediately at the current market price of $2 using a Buy Stop at $3 (or better).

You might want to read this article about penny stocks, they are highly speculative and risky.

http://en.wikipedia.org/wiki/Penny_stock

Placing Futures forex Stocks Orders. Market Stop Limit OCO Pt4

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