In Belgium, different stock orders exist that define how traders will complete a transaction.
When the stock market was first established, fundamental orders were used to buy and sell securities or bonds. These actual orders remain in use today on some exchanges where they fall under the name of ordinary orders.
In French, these are known as ‘order simples’; in Dutch, ‘Algemene order’. They allow traders to buy a given number of shares at a specified price to resell them.
Such an order does not have any time limit and can be amended or cancelled at any time before its execution.
Each has its benefits that an investor should know before entering into any transaction. For example, a stop-loss order can help protect an investor’s capital in case the price of the security falls suddenly.
- Basic orders are executed immediately when the order is placed in the system
- Specialised orders give an investor more flexibility
- Limit orders help investors determine how much they would like to pay for a security (in case of buy limit or sell limit)
- Stop-loss orders are used to protect an investor’s capital in case the price falls suddenly
- Stop limit order is similar to the stop-loss order with the difference that it specifies the maximum price at which sale should take place
- Market orders can be beneficial if an investor needs access to their capital quickly and with little fuss but may result in high transaction fees/ taxes depending on the country. Please note that different types of market orders exist in some countries but not in others
An investor should be aware of all the different types of orders before entering into any transaction. By doing so, they can make an informed decision about what kind of order will best suit their needs.
Besides the entire orders, specialised orders offer more possibilities when buying and selling assets on the stock market.
Some of the most common types of specialised orders include:
A limit order is an instruction to buy or sell a security at a lower price than the current market price (in the case of a buy limit order) or higher than the current market price (in the case of a sell limit order). The aim of using a limit order is to ensure that the trade is executed at a predetermined price or better.
It is an instruction to sell a security when the market price falls below a certain level. This type of order is used to protect against losses if the security’s price falls suddenly.
Stop limit order
A stop-limit order is similar to a stop-loss order, except it specifies the maximum price at which the sale should occur.
A market order is an instruction to buy or sell a security at the best available price on the stock market. Unlike limit and stop orders, this type of order does not guarantee that brokers will execute the trade at a particular price.
The use of specialised orders can provide investors with additional flexibility when trading securities and help them achieve their investment goals.
It is essential to carefully consider whether or not they are appropriate for you before opening a position.
This is because once such an order has been entered into the system, it cannot be amended and may therefore result in one of two outcomes: either if the order can be matched by other orders or transactions that have already been entered into the system, it will then take effect; or, if there is no match and no market conditions (i.e., prices) making it possible to execute the order at its determined price, the order will expire and become invalid.
Please note that different types of orders can exist within exchanges where this article applies. Also, note that different types of orders exist in some but not all countries. For example, while stop-loss orders are allowed on some exchanges, they are not allowed on others.
So please consult with your broker to see what types of orders are available to you when trading on the Belgian stock market.
The different types of orders available in Belgium offer investors various options when buying and selling securities. Saxo Belgium can answer more of your questions.
By understanding the differences between these orders, investors can make more informed decisions about which type of order will best suit their needs.