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Trading
Tools
Commodity
Futures Trading Info Center is committed to
offer the very best in trading tools to assist the commodity futures
speculators, investors, and hedgers in their trading. From Order Placing Guide
to Margin Requirements, Contract Specifications and Commodity
Calendar, we offer it all.
Major
Types of Orders and How to place them properly
Placing orders in the futures and options markets
can be a daunting task. The following is a list of the most common order types.
Market Order The most common type of
order is the Market Order. If you enter a Market Order, you state
the number of contracts you want to buy or sell in a given contract month. You
do not specify a price, since your objective is to have the order executed as
soon as possible at the best possible price. Once a Market Order is
placed it is filled and cannot be canceled.
Market on Open (MOO)
- The order will be executed on the market open within the opening range.
Market on Close (MOC)
- The Order will be filled at Market within the closing price
range.
Limit Order
- The Limit Order specifies a price
limit at which the order must be executed. In other words, it must be filled at
that price or better. The advantage is that you know the worst price you will
get if the order is executed. The disadvantage is that you cannot be certain
that the order will be filled.
When buying, if the order price is lower
than (below) the current market price, it is a Buy Limit.
As an example, with the market trading at 250,
Buy 1 Dec Corn 250 on a Limit (or better…fill at 250 or lower).
Order can only be filled at the stated price (250) or lower (better).
When selling, if the order price is higher
than (above) the current market price, it is a Sell Limit.
As an example, with the market trading at 250,
Sell 1 Dec Corn 255 on a Limit (or better…fill at 255 or higher).
Can only be filled at the stated price (255) or higher (better).
Stop Order –
Stop Orders
are not executed until the market reaches a given price, at which time they
become Market Orders.
When buying, if the order
price is higher than (above) the current market price, it is a Buy
Stop.
As an example, with
the market trading at 335,
Buy 1 Dec Wheat at 335 Stop.
Can only be filled at the Market, after the Market trades (or is "offered") at
335 or higher.
When selling, if the order
price is lower than (below) the current market price, it is a Sell
Stop
As an example, with the market trading at 335,
Sell 1 Dec Wheat 330 Stop.
Can only be filled at the Market, after the Market trades (or is "bid") at 330
or lower.
Market If Touched (MIT)
-
Market If Touched.
If the market trades at the trade price, the order will be filled at the next
best price. Can only be used on Limit orders (not Stops).
Good Till Canceled (GTC)
-
Good Till Canceled
(or Open Order). Used in conjunction with a Limit
or Stop order. Order will remain valid and worked until client cancels order, or
it is filled, or contract expires
GTC Order Does Not Cancel Automatically!
As an example, you are long 1 Nov
Soybeans and have a GTC order to sell 1 Nov Soybeans @ 537 Stop. You decide
to sell your 1 long Nov Soybean on a Market order. Your GTC order must be
canceled…or you will sell (short) 1 Nov Soybean if the market trades (or
is "bid") at 537 or lower.
If an order is not designated Good Till Canceled, it is a Day Order and
will expire at the end of the current trading session unless filled or
canceled prior to the close.
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