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Matrix – Placing Market, Limit, and Stop Orders
The Matrix window can be used to place orders for Stocks, Futures, Forex, and Options. In
this tutorial we will use a stock symbol for demonstration purposes, but the functionality
applies to all different asset classes. I will use my keyboard to type in the symbol
for Microsoft, MSFT and press the Enter key to change the symbol in the Matrix.
Market Orders
A Market order is an order to buy or sell at whatever the current trading price is at
the time the order reaches the trading floor. To place a market order click the Buy Mkt
or Short Mkt buttons available in the Trade Bar on the right side of the Matrix. If you
are trading Futures or Forex, the Short Mkt button will be labeled Sell Mkt. The labels
on these buttons will also change if you have an open position. For a demonstration, let’s
buy 100 shares of MSFT at the current market price. I can select 100 from the recently
used quantities, or I can use the directional arrows to increase or decrease the quantity.
Let’s click the Buy Mkt button.
A confirmation window comes up providing details about the order I’m about to place, such
as type of order, the route, the duration, the account number, the estimated price per
share, the estimated cost for the transaction, and the estimated commission charge. Once
you become familiarized with the Matrix order entry functionality you may wish to disable
these confirmation windows. In this tutorial I will disable the confirmation window by
clicking the checkbox next to “Don’t show me this again for Matrix Equity orders”.
If you are using confirmations, the order will not be placed until you click the Yes
button on this window.
Once the order is filled, a horizontal bar will highlight the average fill price for
the position. The Order Status bar at the bottom will also display details about the
order. Let’s increase our position size by entering another market order to buy 100
shares of MSFT at market. To do this, I check the quantity and click the Buy Mkt button.
Since confirmations are disabled the order is automatically placed and I get an immediate
fill from the market. The horizontal bar has shifted showing an average fill price for
my entire position.
Let’s close this position with a Market order. I will click the P or position button
to automatically fill the quantity field with my actual position size. Clicking the Sell
Mkt button will immediately place an order to sell my position at market.
Limit Orders
A Limit order is an order that is executed only when the specified limit price or a better
price is reached. To place a limit order, click a cell under the Bid Size or Ask Size
columns that corresponds to the price you would like to set as your limit price. By
using the Auto (Limit Stop) functionality in the Trade Bar, the order type will automatically
be set to Limit if you place a Buy order below the current trading price.
Let’s demonstrate by placing an order to buy 100 shares of MSFT at this price. Buy
and Buy to Cover orders are placed using the Bid Size column. I check the quantity and
other order settings in the trade bar and then I click the blue cell next to my desired
limit price. As you hover over the cell, the order details display under the Orders column.
Clicking the cell will automatically send a limit order at this price. Active orders
waiting to get filled will appear under the Orders column. Abbreviated letters identify
the type of order it is. There are four abbreviations. B stands for Buy or Buy to Cover, BS stands
for Buy Stop or Buy to Cover Stop, S stands for Sell or Sell Short, and SS stands for
Sell Stop or Sell Short Stop. The order indicator also displays the quantity and if any shares
or contracts have been partially filled.
Let’s place an order to sell short 100 shares of MSFT at this price. Sell and Sell Short
orders are placed using the Ask Size column. With Order Type set to Auto (Limit / Stop),
selecting a price above the current trading price will place a Sell Short Limit order.
Selecting a price below the current trading price will place a Sell Short Stop Market
order. I will click the red cell that corresponds to the price I want and a Limit order to Sell
Short MSFT is placed at this price.
Limit orders are also used as profit targets. In this Matrix I’m long 500 shares of MSFT.
The average entry price of my position is highlighted by the blue horizontal bar. Let’s
place a Limit order 10 cents above this entry price to capture some profit. Since I’m
placing a Sell order, I hover over the red cell that corresponds to my exit price and
Sell 500 Limit is displayed under the Orders column. Clicking the cell automatically places
this order.
You may also use the Open P/L column on the left to place Limit orders when exiting positions.
In this Matrix I’m short 500 shares of MSFT. Let’s place an order to exit my position
when a 50 dollar profit is reached. I hover my mouse cursor over 50 dollars and Cover
500 Limit displays in the Orders column. Clicking this amount will automatically place an order
at the price that would produce a 50 dollar profit.
Stop Market Orders
A Stop Market order is an order that is executed at whatever the current trading price is but
only after the specific stop price is reached. For example, to place a Buy order at a price
higher than the current trading price a Stop order is needed. The same applies if you wish
to Sell Short at a price lower than the current trading price. Let’s enter an order to Buy
100 shares of MSFT if it trades at the High of today. The high is marked by the green
horizontal line on top. I will hover over the blue column at the price that corresponds
to the high of today. Notice that a Stop Market order to buy 100 shares of MSFT is displayed
under the Orders column. Clicking the cell automatically places this order. If MSFT trades
at this price, a market order is sent for execution.
Stops are commonly used as protective exit orders in case of losses. In this Matrix I’m
short 500 shares of MSFT. The average entry price of my position is highlighted by the
red horizontal bar. Let’s place a Stop Market order 10 cents above this entry price. Since
I’m placing a Buy to Cover order, I will click a cell under the Bid Size column. I
hover over the blue cell that corresponds to my exit price and Cover 500 Stop Market
is displayed under the Orders column. Clicking the cell automatically places this order.
You may also use the Open P/L column on the left to place Stop Market orders when exiting
positions. In this Matrix I’m long 500 shares of MSFT. Let’s place an order to exit my
position when a 50 dollar loss is reached. I hover my mouse cursor over negative 50 dollars
and notice how Sell 500 Stop Market displays in the Orders column. Clicking this amount
will automatically place an order at the price that would produce a 50 dollar Loss.
Stop Limit Orders
A Stop Limit order combines the features of a Stop order and a Limit order; where if the
Stop price is reached, a Limit order is sent. The limit order is only executed at the specified
limit price or better. To place a Stop Limit order in the Matrix, the Order Type in the
Trade Bar needs to be set to Auto (Limit/ Stop Limit) or Stop Limit. Stop Limit orders
in the Matrix require two clicks; the first one to select the stop price, and the second
one to select the limit price. Let’s suppose that we would like to buy 500 shares of MSFT
only if it trades at the High of today; but to limit the exposure to the Market let’s
specify a Limit price of one tick above the High. I click on the blue cell that corresponds
to the High of the day and this will be the Stop price that will trigger the order. Notice
how the Orders column displays the Buy Stop but there is a question mark next to Limit.
The order is not sent until a Limit price is selected. I click the blue cell one tick
above the High of the day and set this as my Limit price. Now my order is complete with
a Stop price and a Limit price selected. If MSFT trades at the high of the day it will
send a Limit order to Buy at the High plus one tick. The order can only be executed at
this specific price or better.
Trailing Stop Orders
Trailing stops can be placed to enter or exit positions. As the market moves in your favor,
a trailing stop will automatically adjust the stop price and remain at a specific number
of points or percentage away from the current trading price. In the Trade bar you may click
the “Buy Trailing Stop” or the “Short Trailing Stop” buttons to place orders.
In this dropdown, the trailing amount can be set in “Points” or “Percentage”.
Make your selection and enter the amount in the amount field.
Let’s place a couple of orders to demonstrate. In this example let’s suppose MSFT is in
a downtrend. I would like to buy 100 shares of MSFT if the price reverses and starts moving
up. I will set my trailing stop amount to points and will enter 5 cents in the amount
field. Clicking the “Buy Trailing Stop” button places an order 5 cents above the current
trading price. If the price of MSFT continues to move lower, my trailing stop will automatically
move down and stay 5 cents away. If the price of MSFT reverses, my stop price will be triggered
and a position opened.
In this other example I am short 100 shares of CSCO. I would like limit my losses by placing
a trailing stop. This time I will select Percentage for my trailing amount and I will enter 0.5
in the amount field. This will set my stop price at half a percent away from the current
trading price. I click “Cover Trailing Stop” and this sends an order to cover my position
if the price moves half a percent in the opposite direction. On the other hand, if the market
moves in my favor, the order will automatically move and continue to stay half a percent away
from the current trading price.
Thank you Thank you for completing this tutorial.
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