| A combination of a buy and a sell order usually forms | | | | movement of prices in the market, limit may |
| a single future trade, where a buy order is meant to | | | | sometimes be left unfilled. Such are used to get a |
| enter the trade and sell order to exit. Futures' trading is | | | | reasonable price though with an uncertainty of being |
| made up of combinations of such separate orders. | | | | unfilled. |
| A trade entered with a buy must be exited with a sell | | | | • Stop: Similar to market orders, stop orders intend |
| order. If you foresee rise in prices, the basic and simple | | | | to buy or sell at best available price, however, these |
| futures trade is to enter the trade with a buy and exit | | | | orders are processed only when the market reaches |
| with a sell and in the case of falling prices, you can | | | | a specific price. For Ex: The market price is $ 1.897 |
| enter the trade with a sell order and exit with a buy | | | | and you place a buy stop order with a price of $1.892. |
| order. | | | | Your stop is converted to a regular market when the |
| Forms of Orders: | | | | market price reaches $1.892. A stop order is activated |
| • Market Order: Market orders are placed to buy | | | | only when the market trades at the stop price or |
| or sell a contract at the existing best price in the | | | | passes the price. |
| market. Most market orders get filled in active markets | | | | • Stop Limit: A combination of a stop and limit |
| but at times with a deviation in the intended price. You | | | | order, these are processed only when the market |
| can use such orders, when you are determined to | | | | touches the specified price. However, such orders get |
| process your even at a slight variation in price. | | | | filled only at the chosen or a better price in line to a limit |
| • Limit: These orders are placed to trade at a | | | | order. |
| specific price or at a better price. Ex: If you place a | | | | Having knowledge of forms of immensely helps you to |
| limit to sell a contract for $ 2.547, your will be filled only | | | | effectively undertake futures trading. |
| at $2.547 or a higher price. Hence, depending on the | | | | |