How to Place a Stock Order: Executing Your First Trade

What's the difference between a market order and a limit order? What does "buy to cover" mean? Understanding how to pull off your first trade can be a little intimidating (and confusing). Let's say you've done your stock homework, you think you've found a winner, and now you're dying to put your new brokerage account to good use and start trading, but you're not quite sure how to do it. Sounds like you might need a little lesson in executing that first trade.

Let's get started.

Understanding Execution

Trade "execution" is just a fancy way of referring to a transaction. When you buy or sell stock, you're executing a trade. To "trade," in investing lingo, usually refers to a particular type of investing strategy, so qualifying your use of the term "trade" with the word "execute" lets other investors know that you're talking about a specific transaction. ...