This article is for general informational and educational purposes only and is not intended as personalized financial advice.
Placing a trade may look simple on a brokerage screen, but behind every transaction is a structured set of directions that determines how it actually happens.
When you submit an order, you’re deciding more than just what to buy or sell. You’re also setting parameters around price, timing, and execution — choices that can affect how, and sometimes whether, a trade is completed.
These details govern execution, not whether an investment is appropriate, but how it is carried out once submitted. Understanding how a trade order is built can help investors better navigate brokerage platforms and market mechanics.
This article walks through the key parts of a trade order and explains how they work together, with particular attention to order types.
Core Components of a Trade Order
Every trade you place includes several key elements:
- Asset (what is being traded)
- Side (buy or sell direction)
- Quantity (how much is being traded)
- Order Type (how the trade is executed)
- Time-in-Force (how long the order remains active)
- Market Timing (when the order can be executed)
- Execution Conditions (how fills are handled)
Each part plays a role, but order type is the foundation because it shapes how the trade interacts with the market.
1. Asset (What Is Being Traded)
The asset specifies what you are buying or selling.
Common examples include:
- Stocks
- Exchange-traded funds (ETFs)
- Mutual funds
- Bonds
- Options or futures contracts
The type of asset determines where the order is routed and which market rules apply.
2. Side (Buying or Selling Direction)
The side indicates the direction of the trade:
- Buy
- Sell
In certain accounts or strategies, additional designations may apply. At its core, however, the side simply reflects whether you are entering or exiting a position.
3. Quantity (How Much Is Being Traded)
Quantity defines the size of the trade.
Depending on the platform, this may be expressed as:
- Number of shares
- Number of contracts
- Dollar amount
Larger orders can sometimes affect execution speed or increase the likelihood of partial fills, especially in less liquid securities.
4. Order Type (How the Trade Is Executed)
The discussion of order types and execution mechanics is for educational purposes only and does not constitute a recommendation to use any specific order type in any particular situation.
Order type determines how your trade enters the market. It controls how price is handled, when execution may occur, and how your order responds to market movement.
Importantly, all standard order types can generally be used for both buy and sell orders. The difference is not the direction of the trade, but the conditions under which execution occurs.
Common order types include:
- Market orders, which prioritize immediate execution at the best available price
- Limit orders, which execute only at a specified price or better
- Stop orders, which activate once a specified price level is reached
- A stop order does not guarantee execution at the stop price and may execute at a materially different price during fast-moving markets.
- Stop-limit orders, which combine a trigger price with a price limit
Each involves trade-offs between speed, price control, and execution certainty. No order type guarantees a specific outcome, and results can vary based on market conditions.
For a more detailed explanation of how these order types function — including examples and execution considerations — see the companion article:
“Placing a Trade: Order Types.”
5. Time-in-Force (How Long the Order Remains Active)
Time-in-force determines how long your order stays open.
Common options include:
- Day orders, which expire at the end of the trading day
- Good-Til-Canceled (GTC) orders, which remain active until filled or canceled (broker limits may apply)
- Immediate-Or-Cancel (IOC) orders, which attempt immediate execution and cancel any unfilled portion
Choosing a time-in-force setting affects how long your trade remains exposed to market movement.
6. Market Timing (When the Order Can Be Executed)
Not all securities are eligible for extended-hours trading, and some order types may be unavailable outside regular market hours.
Some brokers allow trading outside standard market hours, often referred to as pre-market or after-hours sessions.
These periods may involve:
- Lower liquidity
- Wider bid-ask spreads
- Increased price volatility
- Limited order type availability
As a result, execution prices outside regular market hours may differ meaningfully from prices during the standard session.
7. Execution Conditions (How Fills Are Handled)
Execution conditions determine whether your order can be filled in portions.
- Partial fills allow pieces of the order to execute as matching buyers or sellers are available
- All-or-None (AON) instructions require the entire order to execute at once
Allowing partial fills may affect how an order is executed, particularly in less liquid markets. Restricting partial fills may reduce the likelihood of execution.
How the Parts Work Together
When you place a trade:
- The asset defines what is being traded
- The side defines direction
- The quantity defines size
- The order type defines pricing and trigger rules
- The time-in-force defines duration
- The market timing defines when execution may occur
- The execution conditions define how fills are handled
Together, these components shape how your order interacts with the market.
Summary
Placing a trade involves more than selecting buy or sell. Each order includes structured instructions that determine how it is handled once submitted.
- Market orders emphasize speed
- Limit orders emphasize price control
- Stop orders automate execution triggers
- Stop-limit orders add price boundaries
- Time-in-force controls duration
- Market timing affects liquidity and pricing
- Execution conditions affect fill flexibility
Understanding these elements can help investors navigate brokerage platforms with greater clarity.
For a more detailed explanation of how order types function — including examples and execution considerations — see the companion article: “Placing a Trade: Order Types.”
Disclosure
This article is provided for general informational and educational purposes only and should not be construed as personalized investment, legal, or financial advice. This article was written on 2/15/2026, and opinions expressed are subject to change without notice based on market or regulatory conditions. Order types and trading mechanics discussed may not be suitable for all individuals or market environments. Brokerage platform features, order availability, and execution policies vary by firm. All investing involves risk, including the potential loss of principal. Readers should evaluate their own financial circumstances and consult with a qualified financial professional before making any financial decisions.