Confused! What if limit order price not met in day trading?

[gautam2000]

Hello Everyone.

I am a total newbie. Have been struggling to have some advice on following questions related to day trading/limit sell order:

1) Shares of ABC company are currently priced at Rs 10, I place an IntraDay order for a limit price of Rs 8 . However, the price of the share never drops down to Rs 8 on that day. Then what is going to happen when the day closes? Will my order be automatically cancelled or I will end up buying the shares at the last closing price? (is this also called short buy)?

2) I already purchased the shares of XYZ company at the beginning of the day for Rs 10 (here I am talking of IntraDay trading only). I then place an order to sell the share for a limit price of Rs 12 (meaning, that once the share price reaches rs 12 or more, then my sell order will be executed). But unfortunately, on that day the XYZ company share price never reaches rs 12 or more. Then what is going to happen? Will my shares be automatically sold at the end of the day (for the last closing price)? (is this also called short sell)?

Any advice will help me clear up some confusion. As I am reluctant in going for day trading with all this confusion.

Thanks.

 

[Smart_trade]

Hello Everyone.

I am a total newbie. Have been struggling to have some advice on following questions related to day trading/limit sell order:

1) Shares of ABC company are currently priced at Rs 10, I place an IntraDay order for a limit price of Rs 8 . However, the price of the share never drops down to Rs 8 on that day. Then what is going to happen when the day closes? Will my order be automatically cancelled or I will end up buying the shares at the last closing price? (is this also called short buy)?

2) I already purchased the shares of XYZ company at the beginning of the day for Rs 10 (here I am talking of IntraDay trading only). I then place an order to sell the share for a limit price of Rs 12 (meaning, that once the share price reaches rs 12 or more, then my sell order will be executed). But unfortunately, on that day the XYZ company share price never reaches rs 12 or more. Then what is going to happen? Will my shares be automatically sold at the end of the day (for the last closing price)? (is this also called short sell)?

Any advice will help me clear up some confusion. As I am reluctant in going for day trading with all this confusion.

Thanks.

1) Your order will remain as a limit pending order and the same is cancelled at the end of the day...you dont have to buy at closing price.

2) If you have enough margin ( meaning full price of the shares bought ) to hold these shares as delivery, then you get the delivery of these shares.If you have bought on margin as a daytrade then it will be sold at 3:10 to 3:15 and position will be squared off.

Smart_trade

 

[Somatung]

Hello Everyone.

I am a total newbie. Have been struggling to have some advice on following questions related to day trading/limit sell order:

1) Shares of ABC company are currently priced at Rs 10, I place an IntraDay order for a limit price of Rs 8 . However, the price of the share never drops down to Rs 8 on that day. Then what is going to happen when the day closes? Will my order be automatically cancelled or I will end up buying the shares at the last closing price? (is this also called short buy)?

2) I already purchased the shares of XYZ company at the beginning of the day for Rs 10 (here I am talking of IntraDay trading only). I then place an order to sell the share for a limit price of Rs 12 (meaning, that once the share price reaches rs 12 or more, then my sell order will be executed). But unfortunately, on that day the XYZ company share price never reaches rs 12 or more. Then what is going to happen? Will my shares be automatically sold at the end of the day (for the last closing price)? (is this also called short sell)?

Any advice will help me clear up some confusion. As I am reluctant in going for day trading with all this confusion.

Thanks.

As you use a broker, what kind of orders does he offer? You must read the tutorial about that from your broker to get an answer to that what your specific brokers offers about that. If you do not know where to search for, what broker do you trade with? Members here can then help you with more specific details about what your broker offers.

Edit: I see that dear ST has already posted to you.

 

[gautam2000]

2) If you have enough margin ( meaning full price of the shares bought ) to hold these shares as delivery, then you get the delivery of these shares.If you have bought on margin as a daytrade then it will be sold at 3:10 to 3:15 and position will be squared off.

Smart_trade

Hi there!

Thanks so much for your clarification. I am able to understand the first answer to my question. But have confusions with your second answer. I guess I will be in a better position to understand it if you can clarify the following:

Please note, all of my below questions are related to IntraDay trading only (day trading)


What does "enough margin" means? // here in my second example, the shares of XYZ company purchased at Rs 10 and then placed a limit sell order for rs 12, (then in this case, is the margin Rs 2 ? i.e 12-10)

What does "bought on margin" means?

What does "Holding" of the shares means? Can shares be hold if one has already placed a limit sell order to sell them?

What does "Delivery" of shares means? What does "Holding Delivery of Shares" means? And how can one do that?

Lastly, what does "position will be squared off." means?

Sorry, if am sounding too sticky. But clarifying in details will help me understand more clearly what you are trying to explain.

Thanks.

 

[gautam2000]

As you use a broker, what kind of orders does he offer? You must read the tutorial about that from your broker to get an answer to that what your specific brokers offers about that. If you do not know where to search for, what broker do you trade with? Members here can then help you with more specific details about what your broker offers.

Edit: I see that dear ST has already posted to you.

Hi there.

Thanks for your reply. I am currently only practicing online share trading through paper based method (meaning, I use virtual share trading site) to get used to trading practices.

I am not sure who a broker is. But this is the following virtual share trading site I got registered to:

http://moneybhai.moneycontrol.com/

Once I am comfortable with the terminologies, process, methods, risks etc, then I would like to venture into real world online share trading through companies like ICICI Direct (so I am not sure who are the brokers in these cases).

Thanks again for your reply.

 

[manishchan]

Hi there!

Thanks so much for your clarification. I am able to understand the first answer to my question. But have confusions with your second answer. I guess I will be in a better position to understand it if you can clarify the following:

Please note, all of my below questions are related to IntraDay trading only (day trading)


What does "enough margin" means? // here in my second example, the shares of XYZ company purchased at Rs 10 and then placed a limit sell order for rs 12, (then in this case, is the margin Rs 2 ? i.e 12-10)

What does "bought on margin" means?

What does "Holding" of the shares means? Can shares be hold if one has already placed a limit sell order to sell them?

What does "Delivery" of shares means? What does "Holding Delivery of Shares" means? And how can one do that?

Lastly, what does "position will be squared off." means?

Sorry, if am sounding too sticky. But clarifying in details will help me understand more clearly what you are trying to explain.

Thanks.

Go through this link to understand these ABC's

http://www.slideshare.net/Gstheproud007/stock-market-for-begineers