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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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Disclaimer: The information presented in this site is for informational purposes only. Investment in futures involves a high degree of risk, your investment may fall as well as rise, you may lose all your original investment and you may also have to pay more on the original amount invested. Consult your broker or advisor prior to making any investment decisions. Past or simulated performance is not a guarantee for future performance. Historical references may not carry into the future as many additional factors influence futures prices.

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Last modified: July 25, 2007