Everyone loves a life hack. Whether it's learning a better way to cut mangos, or how to avoid paywalls on news articles. But did you know there are hacks to make buying and selling stocks arrears and more predictable?
We’ve talked about the different types of investments you can make, but we haven’t discussed the different buying mechanisms out there. These different buying methods are designed to give you more control, and can save you a big headache. Today, we’re breaking down the different methods for buying and selling investments, and the benefits of using each.
📰 In The Headlines
Breaking down this weeks biggest stories
Texas has been experiencing a cold snap
Over the past few days, Texas and other southern states have been experiencing a cold weather snap of historical proportions, and its been a bit of a mess. Energy shortages left millions of people without power for days, causing oil prices to bounce back up, and many people are wondering “What about the turtles?”
Congress is taking a look at what went down with Gamestop
Today, the House Financial Services Committee is holding a hearing about the events associated with the Gamestop short squeeze last month, and they’re asking some big questions, like: Were ‘troll’ or ‘bot’ actors a part of creating the social media hype around the stock? Did Robinhood cut off trading to Gamestop to protect Citadel and their investors? The CEO’s of Robinhood, Gamestop, Reddit, and some major hedge funds are all expected to make an appearance.
The land down under is putting restrictions on Facebook’s news services
Facebook has announced that they are preventing people inside Australia from accessing news stories on its site. In addition, Facebook users in other countries will not be able to view or share news stories from Australian outlets. This comes as a response to a proposed new Australian law that would force social media platforms to pay the news organizations for links shared on its sites. News and social media have been a hot topic lately, especially after the rampant spread of misinformation during the US’s 2020 election. This could have huge implications for the relationship between news and social media going forward.
💫 Hack Stars
2020 was a year of a lot of first, and for many Americans, it was their first time investing. Many economists are pointing to the surge of first-time investors as the force behind the stock markets steadily increases despite shutdowns.
The problem is, many of these first-time investors are coming in with only the basics of trading, and aren’t taking advantage of the tools at their disposal. Here are a few of the buying methods available with most trading platforms that you can use to make your stock transactions little simpler.
😎 The Classic
Market Order is the basic buy. Use it to buy or sell a security immediately, guaranteeing that the order will be executed, but not a certain price. A market order generally will execute at or near the current bid (for a sell order) or ask (for a buy order) price. However, it is important to remember that the last-traded price (or price listed) is not necessarily the price at which a market order will be executed.
🥃 The Optimist
Limit Order is when you set an order to buy or sell a security at a specific price (or better.) A buy limit order will only be executed when the securities price hits your limit price or lower, and a sell limit order can only be executed at the limit price you set or higher. For example, if an investor wants to purchase shares of X stock for no more than $10, they could submit a limit order and the purchase will only go through when the price of X stock hits $10 or lower.
🕵 The Lookout
Stop Order is an order to buy or sell a stock once the price of the stock reaches a set price, known as the stop price. When the stop price is reached, a stop order becomes a market order.
👯♀️ The Combo
Stop Limit Order is an order to buy or sell a stock that combines the features of a stop order and a limit order. Once the stop price is reached, a stop-limit order becomes a limit order that will be executed at a specified price (or better). The benefit of a stop-limit order is that you can control the price at which the order can be executed.
🦺 The Safe Bet
Trailing Stop Order is designed to protect your gains by enabling a trade to remain open and continue to profit as long as the price is moving in the investor’s favor. The order closes the trade if the price changes direction by a specified percentage or dollar amount
Recurring Order lets you put your investing on autopilot by continually putting a set amount of money into the stock or ETF of your choice on a set schedule. Not all platforms offer this service, but Robinhood, E-Trade, and most professional traders will do this for you.
Word of the Day
(n.) Someone does not accept commission for trading on behalf of others. They only buy and sell securities or funds that contain a basket of securities on a non-professional basis.
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