Below the Market Order Type
Below the Market Definition
A below the market order is a request to buy or sell a security below its current price. This type of order is utilized for both short and long positions. It can also be used to both initiate and exit positions. This is a popular order type for short sellers who want to see price break through an important support level, prior to initiating a position. The below market order is also a stop market strategy for traders who are in losing long positions.
Below the Market Order Types
There are a number of below market orders utilized by traders on a daily basis. Below are a list of the most common types:
Limit order to BuyOrder is placed below the current market price in order to exit a winning short position.
Stop Limit order to sellA sell order is placed below current market levels. This is a popular strategy for breakout traders who are waiting for a breakdown of key support levels, prior to taking a short position.
Stop Market Order to SellThis is a stop strategy for long positions, where a trader places a sell order below the current market levels in order to stop out a losing long position.
Below the Market Order Chart Example
Below is a chart example of a below the market sell order for MOT. So, if MOT breaks through $4.25, a short order will be exeucted to enter a short position.