Difference between a sell order and a stop?

Hi wats the difference btw a sell order and a stop loss?

for example if i buy stock XYZ at 90c and i put a sell order at 85c or a stop loss at 85c wats the difference??

do stop loss orders get preferential access to the queue? otherwise why would u pay more for a stop?

thanks guys

Re: Whats the diff. btw a sell order & a stop?

the sell would just be sold at market if it is lower than current sp.

if you bought at 90 and put a sell at 85 if the sp was still at 90 then it would just be sold at market ie 90. if you put a stop in at 85 it wouldnt be sold until sp dropped to 85.

thats how i see it anyway, correct me if im wrong

Re: Whats the diff. btw a sell order & a stop?

dj_420 said:

the sell would just be sold at market if it is lower than current sp.

if you bought at 90 and put a sell at 85 if the sp was still at 90 then it would just be sold at market ie 90. if you put a stop in at 85 it wouldnt be sold until sp dropped to 85.

thats how i see it anyway, correct me if im wrong

Click to expand...

thanks dj
can any1 else confirm this?

coz a mate of mine bought AUZ at 9,5c today stop at 9,2c, but he goes to me that all he did was place a buy at 9.5 and a sell at 9.2c....

and he reckons thats the same as a stop?

would it have done the job for him had the sp gone south?

Re: Whats the diff. btw a sell order & a stop?

nizar said:

thanks dj
can any1 else confirm this?

coz a mate of mine bought AUZ at 9,5c today stop at 9,2c, but he goes to me that all he did was place a buy at 9.5 and a sell at 9.2c....

and he reckons thats the same as a stop?

would it have done the job for him had the sp gone south?

Click to expand...

Nope,

Your mate is lying, or using a full service broker who knows what he is on about.

If he merely put in a sell at 9.2 with the price at 9.5, it would be immediately sold at the bid.

A stop order is an IF-THEN order. In other words, IF the share trades at 9.2, THEN sell at market (or at some limit below 9.2)

Cheers

Re: Whats the diff. btw a sell order & a stop?

I don't see how that is possible to do, as DJ says it would just be sold at market.

Re: Whats the diff. btw a sell order & a stop?

wayneL said:

Nope,

Your mate is lying, or using a full service broker who knows what he is on about.

If he merely put in a sell at 9.2 with the price at 9.5, it would be immediately sold at the bid.

A stop order is an IF-THEN order. In other words, IF the share trades at 9.2, THEN sell at market (or at some limit below 9.2)

Cheers

Click to expand...

Thanks Wayne,
Yeh thats sounds about right.

He seems pretty happy with himself though, his first T+3 and $2.4k minus costs for 3 hours work - a good effort.

Im not sure how that couldve worked though... hes just with standard version of Commsec....
HMmm...

Re: Whats the diff. btw a sell order & a stop?

nizar said:

thanks dj
can any1 else confirm this?

coz a mate of mine bought AUZ at 9,5c today stop at 9,2c, but he goes to me that all he did was place a buy at 9.5 and a sell at 9.2c....

and he reckons thats the same as a stop?

would it have done the job for him had the sp gone south?

Click to expand...

Perhaps 9.2c was his pre-determined exit point and by watching the market, he simply executed his sell when price traded at 9.2. In his mind, that was his "stop-loss" point which he executed himself rather than letting his system or broker handle it for him.

As Wayne has explained, contingent orders are conditional. Using your friend's example, the stop loss order could have been placed as a contingent order with the broker or an online system where the instructions are to sell my x number of shares at market price IF the market trades at 9.2c. This way you don't have to watch the screen to execute your own stop loss.

Stop entry orders can be done in exactly the same way and often useful for people with mechanical systems, those who can't monitor their trades throughout the day, or perhaps just used as a safety net when used as a stop loss.

Not sure why E-trade charge for this as WebIress has it's own inbuilt contingent order system for no extra charge. Perhaps E-trade guarantee execution at your price where normally contingent orders do not guarantee price - they only activate a market order when your pre-selected price is hit or passed.