Charles Schwab Stop Limit Order

Charles Schwab Trailing Stop, Stop Limit Loss, Bracket Order Types


StreetSmart Edge Charles Schwab order types - market, limit, stop, stop-limit. StreetSmart Edge OTO, OTT, OCO, MIT, MOO contingent orders - differences explained for 2022.


Charles Schwab Order Types Explained


Investing at Charles Schwab has a lot of advantages as there are so many different securities to choose from. Whether you trade mutual funds, ETFs, stocks, futures, options, or any of the other available assets at Charles Schwab, one thing is certain: knowing your order types can help you be more successful.

Charles Schwab is a full-service broker catering to virtually every type of investor. The wide selection of investment opportunities, and how to take part in them, can be a bit daunting to newer investors.

To make things easier for you, we have put together a list of order types that are commonly used for assets available at Charles Schwab. Read on for more details.


List of Order Types at Charles Schwab


Here are the order types that you can use at Charles Schwab.

  • Market Orders
  • Limit Orders
  • Stop Market Orders
  • Stop Limit Orders
  • Trailing Stop Orders
  • OTO (one triggers other)
  • OTT (one triggers two orders)
  • OCO (one cancels other)
  • MIT (market if touched)
  • MOO (market on open)
  • Contingent On Price
  • Contingent On Time
  • Contingent On Volume
  • Contingent On Spread Price


Basic Order Types and Time in Force


At Charles Schwab, there are some basic order types that all other orders are based on. These are market orders, limit orders, and stop loss orders.


Schwab Market Orders


Market orders are orders placed for ‘at the market’ prices. As soon as a market order is activated, the trade will go through at the nearest possible price. The nearest price may be the bid, the ask, the last, or the mid price. The exact price that a market order fills at is dependent on a variety of factors, such as how fast a market is moving, how many contracts/shares are being traded (liquidity), time of day, and direction of the price movement.


Schwab Limit Orders


Limit orders are orders paced in the market at specific prices. When limit orders are actuated, the fill prices are generally the same (or at least very close) to the limit price defined in the order. Limit orders can help investors control the precise prices that they get for buying and selling securities. There are times, however, when limit orders are less than ideal, such as in low liquidity environments, erratic markets, and gaps.


Schwab Stop Loss Orders


Stop orders allow investors to protect themselves against price movements against their positions. For example, when buying a security, a stop order is usually placed under an area of perceived support to liquidate the position if it loses too much of its value.

At Charles Schwab, you can place a variety of stop loss orders.

A Stop Market order is a stop order that liquidates a position using ‘at the market’ prices.

A Stop Limit order is a stop order that liquidates a position at a specific price predefined by the investor.

A Trailing Stop order is a stop order that can be either a market order or a limit order. A Trailing Stop follows price in the direction of the desired price movement for a given position. The purpose of a trailing stop is to ‘lock in’ profits from a trade. Trailing stops can trail the price of an asset in dollar increments or based on a percentage.

Here is a comparison of stop loss orders, courtesy of Charles Schwab:


Schwab Stop Orders


Time in Force (TIF)


Time in Force is an important concept that every investor should be aware of, and it affects all of the various order types available at Schwab.

Time in Force controls the duration that an active order can stay in the market. When placing an order into the market that is not intended to fill right away, you should decide if that order should last for a single trading day, or if it should remain active and present until it either fills or is canceled.

For orders good for only a single day, use Day orders. For orders that stay active across trading sessions, use GTC (good till cancelled).


Charles Schwab Comparison


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Margin
Rate
Maintenance
Fee
Annual IRA
Fee
TD Ameritrade $0 $49.99 ($0 to sell) 11% $0 $0
WeBull $0 na 6.99% $0 $0
Firstrade $0 $0 9.5% $0 $0
Charles Schwab $0 $49.95 9.825% $0 $0


Schwab Advanced Order Types


Although the basic order types available at Charles Schwab are fine for simple scenarios, many investors prefer a more nuanced order placement approach.

The most popular types of advanced orders are bracket orders and sequence orders. Investors can choose between several bracket order types at Charles Schwab.

Here are the bracket orders that are available:

OCO (one cancels other) orders allow investors to put two active orders in the market on either side of their position. Often thought of as ‘take profit’ and ‘stop’ orders, these active orders are both meant to close a position with a profit or a loss, whichever is hit first. When price either moves up or down to one of these orders to trigger it, the other is automatically cancelled.

OTO (one triggers other) orders are similar to OCO orders in some ways. Instead of placing two orders in the market at the same time, however, OTO orders will place one order in the market at a time. When that order is filled, the ‘other’ order is placed into the market automatically.

OTT (one triggers two) orders are the same as OTO orders with the addition of one more ‘other’ order. The first order is sent to the exchange, and two more are held back until the first order is filled. Investors may wish to use OTO and OTT orders to strategically change a directional bias if certain criteria affecting their position changes. They can also be used to scale into and out of positions as specific price levels are reached.


Contingent Orders


Contingent orders are another form of advanced orders. These are orders that are held until certain criteria is met. At Schwab, investors can set orders that are contingent on price, time, volume, and spread price.

There are many possible uses for these types of orders, but one example could be that you wish to buy a stock at market price IF volume reaches a certain percentage point above average. Meme stocks and pink sheets would both be good candidates for these types of orders.


Ben Wright
About the Author
Ben Wright is an investor, a trader, an educator, and something of an explorer. He spends his days in the markets when he is not teaching or spending time with his family. Ben writes about stockbrokers, markets, investment vehicles, promotional offers, and tools that help investors make the most of their time in the markets.