Open orders refer to buy or sell orders that have not yet been executed.
The order is usually valid until executed or canceled by the trader, or in some cases, until the end of the trading day.
Open orders may be held for an extended period of time, especially if they are not limit orders (orders to buy or sell a security at a specific price or better).
There are different types of open orders, including:
- Market Order: This is an order to buy or sell a security at the current market price. Until the trade is executed, it remains an open order.
- Limit Order: A limit order is an instruction to trade a security at a specific price or better. For example, a buy limit order will only be executed at the limit price or lower, while a sell limit order will only be executed at the limit price or higher.
- Stop Loss Order (also called a “Stop Loss Order”): This is an order to buy or sell a stock when the stock reaches a specific price (called the Stop Loss Price). When the stop price is reached, the stop order becomes a market order.
Open orders are a key aspect of trading as they allow you to set a trading strategy and then wait for the market to meet your conditions, rather than having to constantly watch the market.
However, they also need to be managed carefully as market conditions can change rapidly and orders may be filled at unexpected times.
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