Pay By Money Order

Pay By Money Order

Pay By Money Order

Buying stocks with market orders is quick and easy. The trader only needs to choose what stock and how much to buy, and places the order. The broker will make the trade at whatever the asking price is, buying as much of the stock as is requested.

This strategy is possibly acceptable when purchasing a stock that trades with high volume, such as one of the Dow 30 Index stocks. These trade millions of shares each day, and the individual investor will likely find that there are plenty of shares are available at the market price he intended to pay.

Using Limit Orders to Buy a Company Stock

As opposed to market orders, limit orders place a cap on the price that an investor will pay for a stock. If the investor wishes to buy 100 shares of XYZ stock, he places a limit order of $10, and the broker will not pay more than $10 for each share of XYZ. If shares are available for less than $10, the broker will execute the order at that price.