This page is to help Subscribers improve this understanding of order instructions. Subscribers new to futures may find IndexALERT’s and ForexALERT’s trade recommendations a little confusing if they’re not familiar with different order types and their abbreviations, or in other words Broker Language. This section provides a summary and explanation of typical orders which Subscribers will see in IndexALERT and ForexALERT.
If you have traded shares before you’ll be aware there is much more to placing an order than just “buy” or “sell”.
In futures there are many order types and expressions used. Although the following order types can either be given to a Client Advisor or entered into an Onlime Trading Platform, for the purpose of this explanation I’ll assume the order will be placed with a Client Advisor.
When placing orders it’s always a good practice to identify the contract month you wish to trade. Although the majority of futures trading is in the closest, or spot month, it’s worthwhile developing good habits by learning to place professional and accurate orders.
IndexALERT produces short-term (1-3 day) trade recommendations in the SPI, NIKKEI, TAIWAN, HANG SENG, DAX, FTSE and MINI NASDAQ futures contracts.
ForexALERT produces mediumt-term (15-21 day) trade recommendations in the Euro Currency, British Pounds, Japanese Yen and Swiss Franc futures contracts.
For the order examples below I’ll use the SPI futures contract where I’ll assume the closest or spot month contract is “September”.
A MARKET order is used when you wish to enter the market immediately and you are not concerned about the price you receive. By using a MARKET order you are instructing your Client Advisor to transact immediately. If you’re looking to sell the SPI then your Client Advisor would hit the nearest “bid” price (the best buying price). Your order would look like this.
Sell 1 September SPI at MARKET.
A BEST order is just like the MARKET order however it allows your Client Advisor discretion in terms of time and price as they attempt to get you the BEST price. Your order would look like this.
Sell 1 September SPI at BEST.
A LIMIT order can be used when you have identified a specific price to trade at. Lets assume you would like to buy the SPI on a pull back from its current rally to 3555. Say 3545. Your order would look like this.
Buy 1 September SPI at 3545 LIMIT.
Your Client Advisor would buy you one SPI contract at 3545 or better.
A STOP order is a MARKET order once a trigger condition is meet. STOP orders are usually used to limit losses when trading and are referred to as STOP LOSSES.
For example lets say that IndexALERT is short the SPI at 3525 and it instructs me to exit if the SPI trades above 3565. If this was the case I would place the following order with my Client Advisor.
Buy 1 September SPI at 3565 on STOP.
If the SPI then continued rallying and traded at 3565 my Client Advisor would then buy me 1 SPI contract at MARKET. He will not be interested in the price he gets. His focus is to buy me 1 contract ASAP!
Alternatively Traders can use STOP orders to enter a position. You may have found a key level at 3570 and wish to go long, or buy the SPI, if that level is traded. If so your order would look like the following.
Buy 1 September SPI at 3570 on STOP.
A STOP LIMIT order has two parts to it. The first part requires a condition to be triggered by the STOP instruction. The second part then places a LIMIT on the price that can be executed. Say if IndexALERT wishes to buy the SPI if it trades strongly and makes a new yearly high above, say 3600. If so you could place the following order.
Buy 1 September SPI at 3600 on STOP, LIMIT 3602.
What this means to your Client Advisor is that if the SPI trades up to 3600 you wish to buy 1 contract immediately, however you don’t wish to pay more than 3602. In most cases you would probably be filled at 3600, however if it’s a key level and the market is hit by huge order flows the SPI may skip right through 3600. So you are allowing your Client Advisor discretion to be able to pay up to 3602 and no more for your single SPI contract. The disadvantage of using a STOP LIMIT order is that after trading 3600 the SPI’s next price may be 3605 and up she goes leaving you right in your market view but without a position because you placed a LIMIT on your buy price.
MARKET IF TOUCHED (MIT)
When trading it’s not always possible to be filled at a resting price due to thin volumes. When this occurs you may be correct in your analysis but not have a position. To avoid this situation you can use a MARKET IF TOUCHED order.
If your analysis suggests the SPI will hit heavy resistance at 3580 and that you wish to sell the SPI at that level and you have a strong preference to get short and not be worried about your price you can use the MARKET IF TOUCHED instruction. Your order would look like the following.
Sell 1 September SPI at 3580 MIT (MARKET IF TOUCHED).
Your Client Advisor will go to MARKET to get you short once the SPI trades 3580.
MARKET ON OPEN (MOO)
A MARKET ON OPEN or MOO order is a two-part order. The order instructs your Client Advisor to transact your order at MARKET on the market’s OPEN. Lets say IndexALERT, following some positive news overnight from the US, wishes to enter the market on the buy side. It’s not interested in what price you have to pay, only that it wants you to be long the SPI as soon as the market opens as it expects a strong rally during the day. Your order would look like this.
Buy 1 September SPI at MOO (MARKET ON OPEN).
Your Client Advisor would look to buy you 1 SPI contract at MARKET once the SPI OPENED. Nice and easy.
MARKET ON CLOSE (MOC)
This is just the opposite to the MOO order above.
The MARKET ON CLOSE order is also a two-part order. The order instructs your Client Advisor to transact your order at MARKET on the market’s CLOSE. Lets say IndexALERT is long the SPI but it’s a position it doesn’t wish to keep overnight as it’s nervous about some key data coming out of the US (like employment numbers). IndexALERT will be happy to remain long during the day but it wishes to exit on the day’s close. Your order would look like this.
Sell 1 September SPI at MOC (MARKET ON CLOSE).
Your Client Advisor would look to sell your 1 SPI contract at MARKET within the last minute of trading before the SPI closes at 4:30pm.
STOP CLOSE ONLY (SCO)
A STOP CLOSE ONLY order is another two-part order. The first part of the order has a conditional level that will trigger the STOP instruction, while the second part says the STOP condition will ONLY be activated on the CLOSE. Lets say IndexALERT is long the SPI at 3550 and its analysis suggests the market needs a strong close to stay long, say a close at or above 3561. If the SPI closes at 3560 or lower than IndexALERT would not wish to remain long in the market. If this was the case your order would like this.
Sell 1 September SPI at 3560 on SCO (STOP CLOSE ONLY).
As the SPI approaches its close your Client Advisor would know that if the SPI looked like closing at 3560 or LOWER that they would have to exit your SPI position at MARKET on the CLOSE. Lets say during the last minute of trading the SPI is trading at 3555, since its below 3560 your Client Advisor would sell your 1 SPI contract at MARKET.
FILL OR KILL (FOK)
A FILL OR KILL order is a LIMIT order that must be filled immediately or cancelled. Say you wished to sell the SPI if it has a weak opening below say 3550. If this were the case your order would look like this.
If the September SPI opens at 3549 or lower than please – Sell 1 September SPI at market on open FOK.
If the SPI opens at 3549 or lower than your order would be filled, however if the SPI opened at 3550 or higher than your order would be cancelled of “killed”.
FILL AND KILL (FAK)
A FILL AND KILL is an order that is executed to the extent that it is possible and then the balance, if there is any, is cancelled. Let’s take the previous example but say we wanted to sell 5 SPI contracts on the open. Our order would look like this.
If the September SPI opens at 3549 or lower than please – Sell 5 September SPI at market on open FAK.
If the SPI opens at 3549 or lower, at say 3545, and only three contracts trade at the opening price before moving lower, then the balance of our order that was not filled on the 3545 open would be cancelled.
Duration of Orders
Unless you give instructions to the contrary all futures orders are DAY ONLY orders. If the order is not filled or executed by the end of day the order expires. IndexALERT’s orders are DAY ONLY orders.
GOOD ALL MARKETS (GAM)
If you wish to place an entry or stop order for both the day and evening SPI sessions you can instruct your Client Advisor by using a GOOD ALL MARKETS instruction.
Lets say you would like to sell the SPI at 3580 regardless of whether it occurs during today or the evening’s SPI session. If this was the case you would place the following order.
Sell 1 September SPI at 3580 LIMIT GAM (GOOD ALL MARKETS).
If you weren’t executed during the day session your Client Advisor would carry your order through to the evening session.
GOOD TILL CANCELLED (GTC)
A GOOD TILL CANCELLED order is one that stays working or alive until it is either filled or cancelled by yourself.
You may be working a STOP loss order that you would prefer not to have to place each day with your Client Advisor so you could use the GOOD TILL CANCELLED instruction. If you’re long and have a stop to exit the position at 3500 you would place the following order.
Sell 1 September SPI at 3500 on STOP GTC (GOOD TILL CANCELLED).
Your Client Advisor would work this order until either you were exited at 3500 or you cancelled the order.