say you bought 100 shares of ibm at 80, you want to sell it if it drops below 70. you can put a 'stop loss' order to sell 100 ibm at 70. there are two possible outcomes when the market touches 70,
1. a *stop market order* will automatically activate a sell order at market (the actual transaction price may not be 70, but the 100 shares is almost guarantteed to be sold).
2. a *stop limit order at 70* will automatically activate a sell order at 70 limit, there is no guaranttee that the 100 shares will be sold. if it is sold, the sell price will be 70 or higher.
*load* is the sales charge when you buy a mutual fund, it is around 5%. it goes to the salesperson (financial planners, bank clerks etc) instead of the fund manager and does not add any value. it may be charge upfront when you buy it (front load) or when you sell it later (called rear load?). try to buy *no load* fund.
1. a *stop market order* will automatically activate a sell order at market (the actual transaction price may not be 70, but the 100 shares is almost guarantteed to be sold).
2. a *stop limit order at 70* will automatically activate a sell order at 70 limit, there is no guaranttee that the 100 shares will be sold. if it is sold, the sell price will be 70 or higher.
*load* is the sales charge when you buy a mutual fund, it is around 5%. it goes to the salesperson (financial planners, bank clerks etc) instead of the fund manager and does not add any value. it may be charge upfront when you buy it (front load) or when you sell it later (called rear load?). try to buy *no load* fund.