A conditional order is an order that includes one or more specified criteria. Generally conditional orders refer to more complex order types used in advanced trading strategies. Sahm offers three types of conditional orders, as seen below:
- Arrival Price
Set triggering prices to place conditional orders. For example, if you think stock ABC will rebound when its price slides to $10/share, then you can set an arrival price order to buy at the bottom.
Buy at the bottom: Last price <= conditional value
Buy on breakout: Last price >= conditional value
Sell for profit: Last price >=conditional value
- Pegging Other Symbols
Pegging other symbols is a type of order placed by an investor to a broker requesting that they buy or sell securities at a price linked to another security. For example, you are bullish on Stock A, and Stock A and B have a correlation that when Stock A rises, the price of Stock B increases even more. In order to gain more profit, you can set a condition order to buy stock B when Stock A rises to a certain level.
A bracket order is a type of order that is placed during intraday trading only. Such orders combine a buy order with a stop-loss and target order. Users can use brackets to limit their losses and lock in profits. For instance, Ahmed is holding Stock A at the price of $10 currently, but he isn’t sure of the future direction of Stock A's price. After an analysis of Stock A, he decided to set a take profit order at $15 while a stop-loss order at $7. If the price of Stock A is getting worse, then the stop-loss order can help Ahmed limit his losses. Conversely, when the stock price increases, the take profit order will assist Ahmed to lock in the profits.
- Iceberg (For Saudi stocks only)
Iceberg orders are large single orders that have been divided into smaller limit orders, usually using an automated program, for the purpose of hiding the actual order quantity. Using iceberg orders can help a trader execute a large buy or sell of securities in the market at a more favorable price.