A day order is a type of stock trading order that is active only during the current trading day. This means that if the order is not filled by the end of the trading day, it will be cancelled and will not carry over to the next trading day.
Day orders are typically used by traders who want to buy or sell a stock at a specific price or better, but who do not want to keep the order open for an extended period of time. For example, if a trader wants to buy a stock at $50 per share, they could place a day order to buy that stock at $50 or higher. If the stock does not reach $50 during the trading day, the order will be cancelled and the trader will not purchase the stock.
There are several different types of day orders, including market orders, limit orders, and stop orders.
A market order is an order to buy or sell a stock at the best available price. This type of order is typically used when a trader wants to quickly buy or sell a stock without having to wait for a specific price.
A limit order is an order to buy or sell a stock at a specific price or better. This type of order is typically used when a trader wants to buy or sell a stock at a specific price, but is willing to accept a slightly better price if it is available.
A stop order, also known as a stop-loss order, is an order to buy or sell a stock when it reaches a certain price. This type of order is typically used as a risk management tool to limit potential losses.
In summary, day orders are a type of stock trading order that is active only during the current trading day. They are typically used by traders who want to buy or sell a stock at a specific price or better, but do not want to keep the order open for an extended period of time. Day orders come in different types such as market orders, limit orders, and stop orders, each one with its unique characteristics that traders can use to suit their trading strategy.