Brokers offer a menu of orders

When you place stock orders with your brokerage, know that there are many kinds of orders you can place.

•Market order. This is for immediate execution at the best price available when the order reaches the marketplace. This is the most common type of order and is nearly always filled, since no price is specified.

•Limit order. This is an order to buy or sell only at a specified price (the “limit”) or better. It’s used by investors who have a maximum or minimum price at which they’re willing to trade.

•Fill-or-kill. If this order cannot be filled immediately, it’s automatically canceled.

•Day order. This order terminates automatically at the end of the business day if it hasn’t been filled.

•GTC (good ‘til canceled). This order remains in effect until executed by the broker or canceled by you. Many brokerages cancel GTC orders after a month or two.

•All-or-none (AON). This is a limit order in which the broker is directed to attempt to fill the entire amount of the order or none of it. An all-or-none order differs from a fill-or-kill order because with an all-or-none order, immediate execution is not required.

•Stop order. This becomes a market order when a specified price is reached or passed. Buy stops are entered above the current market price; sell stops are entered below it. For example, you might place a stop order to have your shares of XYZ automatically sold if it falls below $40 per share. A stop order guarantees execution but not price.

•Stop limit order. This is similar to a stop order, but it becomes a limit order instead of a market order when the price is reached or passed. If you place a “sell 100 XYZ $55 stop limit” order, if XYZ drops to $55 per share or below, the order becomes a limit order to sell 100 shares at no less than $55. This order doesn’t guarantee execution.

Some of these major types of orders can be combined. For more on brokerages, visit www.brokerage.fool.com and http://dmoz .org/Business/Investing/Brokerages.

Ask the Fool

Q: Why do I see some stocks listed as growth stocks in one place but as value stocks in another place? — G.N., Lafayette, Ind.

A: The adjectives “growth” and “value” often aren’t too meaningful, and they aren’t even exclusive of each other. After all, an ideal prospective investment would probably be increasing sales and earnings rapidly (growth) and also be priced below what it’s really worth (value). A company that begins increasing sales or earnings significantly may be dubbed a growth stock, and if its stock price ever seems low, it might be deemed a value play. Look for both value and growth when investing.

Q: Is there an optimal time of day, week, month or year to buy and sell stock? — T.D., Nashua, N.H.

A: Instead of looking to your watch or calendar for the best time to buy, look to your notebook or noggin. Ask yourself if you’ve done enough research to determine that the company is financially healthy and growing, has sustainable advantages over its competitors, and has a promising future. Then determine whether the current stock price offers a good chance of growth. Some terrific companies might be priced so high that it’s hard to rationally imagine them advancing much more in the next few years.

Evaluating a company’s fair value is not easy, though. Measures such as price-to-earnings (P/E) ratios and price-to-cash-flow ratios can help. But in order to keep improving your results, aim to keep learning more about investing. Our how-to guides at www.fool.com/shop/howto can help.

Once you’re confident that you’ve found a great company selling at a good price, that’s probably the best time to buy.

My dumbest investment

I recently decided to get back into the stock market game. I’d saved up $12,000 after paying off my car and becoming completely debt-free. I put it all in stocks instead of letting it sit in a savings account, as the historical average of 10 percent returns instead of the 4.5 percent I was getting at my bank seemed too good to pass up. I invested all of my money quickly, in whichever stocks were topping the charts at that time. A third of my portfolio was invested with money I borrowed on margin from my brokerage. Well, when the stock market swooned briefly, I ended up selling many holdings and losing money. It was a humbling experience. I’m a more confident, more long-term investor now. — H.H., El Segundo, Calif.

The Fool Responds: Remember that the 10 percent annual stock market return is a long-term average. In your own investing period, you might make more — or less. Be careful with margin, too. It can boost your gains, but it can also help you lose much more than you invested.