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 Buy

Order is placed below the current market price in order to exit a winning short position.

Stop Limit order to sell

A 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 Sell

This 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.