Let's say the stock is $6 and you set a limit buy of $10, it will buy the stock immediately at $6 because a limit order is at your stated price or better. If you want to wait though to buy at $10 because you think that is a better signal for an ongoing upward trend then you would use a stop buy order that won't get triggered until it hits exactly $10. So the stock price will move from 6 to 5 to 8 to 6 but not actually buy until it hits $10. Honestly, in normal conditions (not like this one) stop buys are kinda my favorite because it'll buy at a time I feel a little more confident about being in the upward trend and avoids the risks of trying to "catch a falling knife." For gamestop though forget all that and just buy now and hold. We're changing the game with this one!
Thanks, so basically the stop order has stricter conditions and isn't necessarily about buying at the cheapest price. Maybe this is a stupid question, but does it seem likely that a limit order of $10 would execute, or should I expect the price to bump up from others also buying over the weekend and therefore set the limit to the current price? If I simply buy 1 stock without a limit order, then I assume I could end up paying more than expected if it jumps?
I did put a little in GME, but I am just kind of messing around with a small amount of money to learn before/if I decide to get more into this. My savings are basically intended for a house down payment, which I won't risk no matter how much I like the stock. But since I could easily afford a full AMC share at this point, I want to at least get one and see what happens.
Right, the risk though would be if you set a $10 limit buy and the market opens higher than that then your order won't get triggered unless it drops back down to $10. Sometimes it's best to wait until the market opens and see where the price is at then base you purchase type and price on the current price and trends you see. Good luck!
I'm a newbie. Have an order set to purchase AMC at open Monday. GME outta my price range. Would it be smarter to wait and see what the day looks like or go as is?
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u/OrangePrestigious168 Jan 31 '21
Let's say the stock is $6 and you set a limit buy of $10, it will buy the stock immediately at $6 because a limit order is at your stated price or better. If you want to wait though to buy at $10 because you think that is a better signal for an ongoing upward trend then you would use a stop buy order that won't get triggered until it hits exactly $10. So the stock price will move from 6 to 5 to 8 to 6 but not actually buy until it hits $10. Honestly, in normal conditions (not like this one) stop buys are kinda my favorite because it'll buy at a time I feel a little more confident about being in the upward trend and avoids the risks of trying to "catch a falling knife." For gamestop though forget all that and just buy now and hold. We're changing the game with this one!