A buy minus order is an order to buy shares only if certain market conditions exist, such as the price being equal to or less than the last trade price. Investors use this strategy to buy shares below market price and make a quick profit.
A buy minus order involves the execution of an order to buy a specific number of shares or securities, with the stipulation that the order to buy shares is not executed unless certain market conditions exist, in particular the price of the actions. With one less buy order, the market price is equal to or less than the price of the last trade for the same stock or security. Also, the price of the previous trade has to be negative. To be negative, the price on the last trade must also be lower, and the minimum change in stock price was one rally or one more zero. Many investors choose to buy shares below market price, with a less specifically buying strategy in mind.
To enter a buy minus order, it is necessary for the investor to first look at the current market price of the security. This will provide the starting point for evaluating the security’s performance and determining if there is sufficient investor interest to proceed. Next, looking at the previous trade price will also influence the decision, as this will be used to look at the history of the security. What the investor is looking for is a trend where there is a reasonable chance that the security will eventually trade below the current market price. After reaching that lower price, the shares are expected to increase in value at a rate acceptable to the investor.
In general, one less buy order is usually a good risk if the previous trade price is relatively close to the current market price. For example, if a stock is currently trading at $30.00 US Dollars (USD) per share, but was trading at $27.00 USD per share a short time ago, the performance may be ideal to fill one less buy order. This is especially true if there is reason to believe that the act of buying below market price will result in ownership of a stock rising to a point that will generate income for the investor before leveling off again. A buy order less is often considered a good way to make a quick profit, especially if the security is sold before the price peaks and starts to fall again.
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