To help you place your Futures and Options orders accurately and confidently, here are some of the types of orders used in the futures markets.
A Market Order will purchase or sell a futures contract for immediate execution at the best available price. In normal market conditions, the Market Order should be filled in a very short time and, in some Futures markets, while you wait on the phone.
A Limit Order will instruct the broker to purchase or sell the commodity at a specified price. When the market moves below (if buying) or above (if selling) the specified price, the Limit Order will be filled.
A Stop Order is generally placed in the market to help limit losses on an established position. This order is placed below the market if you are long and above the market if you are short. If the market reaches your Stop Order's specified price, the Stop Order becomes a Market Order and will be filled at the market.
Good Til' Cancelled (GTC) Order
A GTC Order is placed to extend an order for more than one day. In general, all Limit and Stop Orders are good only for one trading day unless specified as GTC.
A Spread Order is placed if you would like to buy and sell two different Futures Contracts, or the same Futures Contract of different contract months simultaneously. Generally, Spread Orders involve correlated markets.
Market On Close
The Market On Close Order specifically instructs the futures broker to buy or sell futures contracts within the closing range.
A Cancel/Replace Order will simultaneously cancel a previous order and replace it with a new order. The new order can only be filled if the previous order has been confirmed cancelled. If the old order was filled then the new order is cancelled. This type of order will protect against filling two orders rather than just one.