| Type of Order |
Definition |
Advantages |
Disadvantages |
| |
|
|
|
| Market |
An order to buy or sell an ETF at the market's current best available price. |
Typically ensures immediate execution. |
Order may get filled at different prices and times, especially in fast moving markets. |
| Limit |
An order to buy or sell an ETF with a restriction on the maximum price to be paid or the minimum price to be received. Also known as the "limit price." |
If filled, your order will only be executed at your specified limit price or better. |
No assurance of order execution. |
| Stop |
An order to buy or sell an ETF at the market price once the ETF has traded at or through your specified price. Also known as the "stop price." |
Designed as an automatic trigger for an order entry or exit once a certain price level has been achieved. |
Order may get filled at a much higher or lower price than the ETF's price, especially in fast moving markets. |
| Stop Limit |
Combines a stop order and a limit order to buy or sell an ETF at a specified limit price (or better) only after the stop price has been reached. |
If filled, your order will only be executed at limit price or better. Also provides an order entry or exit threshold. |
No assurance of order execution. |
| Short Sale |
A trade that involves selling an ETF you do not own because you expect to purchase it back later at a lower price. |
A decline in the ETF's price provides the potential for a profit. |
An increase in the ETF's price could force you to buy it back at a substantially higher price you sold it for, resulting in a loss; your account will accrue margin interest for the amount of time the ETF is borrowed. |
