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There are many investors who are going in for tech company stocks like Amazon that are gaining popularity in the market today. The company generated a revenue of over $469.8 billion in 2022, and in 2020, it returned more than 76% of its revenue to investors.
Kavan Choksi- an overview of the order types
Kavan Choksi is an eminent investor, wealth consultant, and business management, expert. According to him, before you invest in Amazon stocks, you must open a brokerage account with an online investment platform to trade on your own. Make sure you research well about the financials of the company along with the other news that affects the share market.
Never rush into the stock market
At the same time, you must be aware of your financial goals, your tolerance for risks, the time horizon for your investments, and your budget. It is prudent to keep aside at least six months of your living expenses, as the share market is highly volatile. Prices of stocks suddenly rise and fall. You surely do not want to face any financial hardship in the future in case the stocks you buy drop in value for some time.
Order types – control the price for buying the stocks with them
Financial literacy and knowledge of stock market terminology will help you make a better-informed choice. The first term you should be aware of is a market order, which is the most fundamental of all the orders you make in the stock market. When you choose this type, the order is executed instantly, and you do not have any control over the price that the share runs.
For instance, the performance of the stock will determine the price that can be either higher or lower than the cost you bargained for when the purchase is being made. In fast-moving markets, you should be careful before choosing this order type if you have a fixed price for a share in mind.
Limit order gives you a better grip
Limit order gives you a better grip over the execution price of the share. You get a price threshold for the stock you choose, and the exchange will execute the fee you have specified. The business does not fill the order if it does not meet that condition.
A stop order is also known as a stop-loss order, and it permits you to fix a stop price for the share you buy. This means you can enter a specific price or better that you want the exchange to follow while executing the order. Once the stock attains this value, it is transformed into a market order for the broker to run instantly.
Business and finance expert Kavan Choksi says the final order type is called the stop limit order. This type also allows you to fix a stop price for the value of the stock. However, there is a slight difference from the stop order as this type becomes a limit order when it attains the limit order and attains the stop price you have specified. It executes the purchase at that price or better.