Selling stocks can be executed in many ways through various services, so we’ll try not to confuse you with many terms at once. Selling will always involve a sell order. It’s a set of rules which your sell will go by, and there are three major ones and many combinations that we won’t bother you with.
- A market order is an order allowing you to sell stocks in a blink of an eye because you’re going to be offering the lowest price on the market. These orders are executed ASAP and are helpful if you want to close the trade quickly for any reason.
- A limit order is about setting a minimum price at which you’re willing to sell your stocks. There’s a guarantee that you’ll sell your stocks for a lower price than you’ve expected, as it might happen with a market order. On the other hand – if you’re not particularly lucky, such an order might not be executed for a long time because of other orders which are more profitable for buyers. That time, in some cases, might be enough for the stock price to decrease to the point where your limit isn’t reasonable anymore, and it will just sit there in idleness until you cancel the order.
- Stop order is basically an emergency brake for traders. It’s an order that automatically sells your stocks if their price comes down to the level predetermined by you. You should always have a stop order, but the selling price on it should be chosen smartly to avoid the chance of selling your stock because of a regular price deviation. There are no downsides to this sort of sell order, except for its execution is always bad news. Consider it a way to get in a bad situation but avoid an even worse one.
That’s the how, and if you’re interested in the why – here’s where you can learn more about your best ways and reasons to sell stocks.
What utility to use for selling stock
If you’re used to buying and selling stock through an app or your broker’s website, it’s all pretty intuitive there. You have the interface and the necessary pop-ups to guide you. Yet if you’re trading through a financial advisor, things might get a bit tricky.
The basic mistake of introverts is to text their financial advisor about selling or buying stocks. That’s not how it works, and in the world of stocks, when mere minutes separate getting rich from going into massive debt, there’s no place for messengers, voicemail, and emails. If you want to sell stocks – call your advisor on the phone and tell them what to do. In other cases, they might not notice your message, and you’ll be the one to blame for it.
When to sell stock
The stock market never sleeps, and if you’ve ever seen the graphs – even the strongest stocks don’t just move up all the time. There are ups and downs caused by multiple things. Don’t forget to consider seasonal fluctuations, be it the literal seasons of the year or the company cycle from one new product release to another. Monitoring the news also helps because if you keep your eyes on the ball – you know when it’s time to open and close your trade.
All your decisions should be based not on spur-of-the-moment reactions but your experience and analysis. Remember, in the end – you’ve taken your financial stability into your own hands by entering the stock market, and you’re the one who has to make it work.