How to buy stocks on Robinhood with Market Limit Stop Loss and Stop Limit Orders

How to buy stocks on Robinhood with Market Limit Stop Loss and Stop Limit Orders




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This video will show you how to purchase shares of stocks on Robinhood using the different methods they have available, Market, Limit, Stop Loss, and Stop Limit.

A market order guarantees the amount of stock you will buy, but not the price. You are basically saying, I want this amount of shares for whatever the lowest you’ll sell them to me is. The issue is that this price could be above what you saw as the current price of the stock. Robinhood “collars” market purchases at 5%, so the most you will pay above the estimated is 5%, but this can still be worrisome. Especially if you want to buy 1000 shares for example, and only 10 get filled near the estimated price, and the other 990 are 5% higher. 5% is a pretty significant price difference and can amount to thousands of dollars. That’s why the better method is to use a limit order.

A limit order guarantees the price you pay, but not if the order will be filled or not. So if the current price is 2.83, and you put in a limit order for 1000 shares at 2.83, then you may only get to purchase 10 of those shares at 2.83, and the other 990 go unfilled. This type of purchase can also be useful if you don’t have time to sit around and watch the stock. If you set a limit .10 below the current price, and set it good till the end of the day, the purchase will only happen if the stock drops to that price.

The stop loss and stop limit orders are much less commonly used. They have a stop price, which triggers your order to be placed. The stop loss will set a market purchase when the stop price is hit. Again this can be dangerous because the market price can fluctuate. The stop limit will place a limit order after the stop price is hit, but the limit is not guaranteed to be filled, so the stock could jump right by your stop price and your limit price without being filled.

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