Have you ever wondered what all of the different types of orders were in futures trading? Did someone once mention a type of order they placed and you had not idea what they were referring to? Well then, we have the guide for you as we break down the most common order types in futures trading.

Note: The same order may have different meanings depending on whether the order is to be executed in pit trading or through an electronic exchange

Market Order – The market order is the most frequently used order. It is a good order to use once a trader has made a decision about opening or closing a position. It can keep a trader from having to chase a market trying to get in or out of a position. The market order is executed at the best possible price obtainable at the time the order reaches the trading venue.

Limit Order – The limit order is an order to buy or sell at a designated price. Limit orders to buy are placed below the market while limit orders to sell are placed above the market. Since the market may never get high enough of low enough to trigger a limit order, a trader may miss the market if he/she uses a limit order. (Even though a trader may see the market touch a limit price several times, this not guarantee or earn the trader a fill at that price.)

• When buying, if the order price is lower than (below) the current market price, it is a Buy Limit.
• Example – With the market trading at 440.00, Buy 1 Dec Corn 435.00 on a Limit (or better fill at 435.00 or lower). Order can only be filled at the stated price (435.00) or lower (better).
• When selling, if the order price is higher than (above) the current market price, it is a Sell Limit.
• Example – With the market trading at 440.00, Sell 1 Dec Corn 445.00 on a Limit (of better fill at 445.00 or higher). Order can only be filled at the stated price (445.00) or higher (better).

Stop Order – Stop orders can be used for three purposes:

1. To minimize a loss on a long or short position
2. To protect a profit on an existing long or short position
3. To initiate a new long or short position

A buy stop order is placed above the market and a sell stop order is placed below the market. Once the stop price is touched, the order is treated like a market order and will be filled at the best possible price.

• When buying, if the order price is higher than (above) the current market price, it is a Buy Stop.
• Example – with the market trading at 440.00, Buy 1 Dec Corn 445.00 Stop. Order can only be filled at the Market, after the Market trades (or is “offered”) at 445.00 or higher.
• When selling, if the order price is lower than (below) the current market price, it is a Sell Stop.
• Example – with the market trading at 440.00, Sell 1 Dec Corn 435.00 Stop. Order can only be filled at the Market, after the Market trades (or is “bid”) at 435.00 or lower.

Stop Limit Order – A stop limit order lists two prices and is an attempt to gain more control over the price at which your stop is filled. The first part of the order is written like the above stop order. The second part of the order specifies a limit price. This indicated that once your stop is triggered, you do not wish to be filled beyond the limit price. Stop limit orders should usually not be used when trying to exit a position. If a trader does not give a limit price, then the stop price and the limit price are meant to be identical.

Stop Close Order (SCO) – The stop price on a stop close order will only be triggered if the market touches the stop during the close of trading. The disadvantage of this order is a fast market in which the last few minutes of trading may cause the order to be filled at an undesirable price. It can, however, protect the trader from getting filled during adverse price fluctuation during the course of the day.

Market If Touched Order (MIT) – MITs are the opposite of stop orders. Buy MITs are placed below the market and Sell MITs are placed above the market. An MIT order is usually used to enter the market or initiate a trade. An MIT order is similar to a limit order in that a specific price is placed on the order. However, an MIT order becomes a market order once the limit price is touched or passed through. An execution may be at, above, or below the originally specified price. An MIT order will not be executed if the market fails to touch the MIT specified price.

Good Until Canceled Order (GTC) – Good Till Canceled (or Open Order). Used in conjunction with a Limit or Stop order. Order will remain valid and working until the trader cancels the order, or it is filled, or contract expires.
GTC Order Does Not Cancel Automatically.

• Example – You are long 1 Dec Corn and have a GTC order to sell 1 Dec Corn at 435.00 Stop. You decide to sell your 1 long Dec Corn on a Market order. Your GTC order must be canceled or you will sell (short) 1 Dec Corn if the market trades (or is “bid”) at 435.00 or lower.

If an order is not designated GTC, it is a Day Order and will expire at the end of the current trading session unless filled or canceled prior to the close.

Once Cancels the Other Order (OCO) – When one order is executed, the other is automatically canceled.

• Example – with the market trading at 440.00 you want to buy at 435.00 Limit (lower) or on an upside breakout at 445.00 Stop (higher). Buy 1 Dec Corn 435.00, OCO Buy 1 Dec Corn 445.00 Stop.

Market on Close (MOC) – This is an order that will be filled during the final seconds of trading at whatever price is available. A FLOOR BROKER RESERVES THE RIGHT TO REFUSE AN MOC ORDER UP TO FIFTEEN MINUTES BEFORE THE CLOSE DEPENDING UPON MARKET CONDITIONS.

Market on Opening (MOO) – This is an order that a trader wishes to be executed during the opening range of trading at the best possible price within the opening range. Not all exchanged recognize this type of order.

Enter and Cancel Order – All orders, except Market Orders, can be canceled and replaced with a different order unless filled prior to cancellation

Spread Order – A trader wishes to take a simultaneous long and short position in an attempt to profit via the price differential or “spread” between two prices. A spread can be established between different months of the same commodity, between related commodities or between the same or related commodities trader on two different exchanges. A spread order can be entered at the market or you can designate that you wish to be filled when the price difference between the commodities reaches a certain point (or premium).

• Example – Buy 1 October Lean Hogs, Sell 1 December Lean Hogs plus 100 to the December Sell side. This means that a trader wants to initiate or liquidate the spread when December Lean Hogs is 100 points higher than October Lean Hogs.

Or Better Order – The pit broker is obligated to get the best possible price for the customer. Putting an OB on an order does not cause him to work harder. If the price is NOT OB, the broker is irritated because he is paying special attention to a ticket that does not deserve it. Think of OB as Market with a Limit. If the price does not have an OB next to it, and the market is considerably better, the pit broker may question the runner to see if the order should have been a stop. They will return the order for clarification which could delay the filling of the order and possibly change the result of the fill. ONLY USE “OR BETTER” IF THE MARKET IS “OR BETTER.”

Fill of Kill Order (FOK) – The fill or kill order is used by traders wishing an immediate fill, but at a specified price. The floor broker will bid or offer the order three times and immediately return either or fill or an unable.

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