What is the purchase order?
Most investors buy and sell securities, including shares, bonds and commodities, with the help of a broker. On the stock market, the stock broker will buy and sell securities on behalf of investors for fees and commissions. As a result, investors acquire access to individual events or more assets through mutual funds, which are the baskets of securities managed by experts. When the investor plans to buy with a broker, the broker gives this broker the right to buy shares from the stock exchange at the best possible price. There is a change on this strategy that can increase the chances of profitability and make an order to buy less risky.
Some companies allow investors to buy shares directly from this entity than through a broker. This is possible through dividends of reinvesting programs or bands, which are corporate programs that can reduce broker charges, although not all companies offer them. Most of the time needs investor broker acts as an intermediarybetween this investor and the stock exchange in which the company states its shares.
The investor can place an order or ask for the purchase of shares with a broker via the Internet, by telephone, in person or via a fax. This application is based on the expectation that the broker will be able to obtain specific security at the lowest price. If the stock price is increasing unexpectedly, the purchase order could lead to a costly purchase for these shares.
If you want to relieve the chance that the broker buys shares at noble prices through a general purchase order, an investor with this broker can enter a more specific purchase limit. The investor must first set a marginal price, the highest value he is willing to pay for certain stocks to start the purchase limit. As soon as this shares drops to this particular price or less, the broker has the right to buy a shares of this investor.
, however, can be volatile, which fromSmall, that it does not have to maintain a specific price level long before the value is increased again. There is no warranty, even after placing the purchase limit that the broker will be able to provide a stock at a certain level. Instead, there is a promise that the broker will not buy shares at a price that exceeds the level of purchase limit established by the investor.