Skip to Content

section header ETF fundamentals

subsection header Trading

What are common order types?

ETFs allow you to place any type of trade that you would with stocks. Here are some common order types:

Market order You buy or sell immediately at the best available current price. When you place a market order, your priority is making the trade quickly, not securing a particular price.
Stop order You set a price—the stop price—at which you automatically buy or sell. When the market hits the stop price, your stop order becomes a market order. The price you then get is the best available current price. That price may have changed, for better or worse, in the moments after your stop price triggered your market order. When you place a stop order, your priority is trying to limit a loss or protect a profit.
Limit order You set a price and execute your trade only if shares are available at that price or better. Limit orders protect you from executing a trade at an undesirable price. When you place a limit order, your priority is securing a certain price, not speed of execution.
Stop-limit order Similar to a stop order, but in addition to setting the stop price, you also set a limit price. When the market hits the stop price your stop order becomes a limit order, at the limit price you specified. When you place a stop-limit order, your priority is trying to limit a loss or protect a profit without the unpredictability of a market order.

 

Your block desk can help

A block desk, if one is available to you, can use its trading tools and network of relationships to help you when you place a large order. Your block desk may be able to:

  • Review the depth of interest in an ETF before placing a trade. You may be able to determine from your trading screen only how many shares are available at best-bid and best-ask prices. Your block desk can evaluate additional availability of shares.
  • Trade in increments to manage any effect that large trades could have on prices.
  • Create and redeem ETF shares directly with the ETF manager, if your broker is an authorized participant.
  • Obtain a quote to execute the entire trade.

A Vanguard sales representative is a good starting point for a discussion about ETF liquidity. He or she can consult with a capital markets specialist on your behalf, or refer you directly. The specialist can access additional data on the depth of liquidity and suggest a trading execution strategy.

For larger trades, the specialist can consult with market makers to help you maximize potential liquidity in the ETF. Your capital markets specialist will know whether your requested trade size is large enough to engage a market maker or whether liquidity is naturally available for your order. A large order for one product may not be a large order for another.

decorative

Basics

Learn the basics of ETFs, including their history, how they compare to mutual funds, what types are available and more.

decorative

Indexing

Learn about the advantages of indexing, how ETFs are indexed, the differences between excess return and tracking error, and more.

decorative

Strategies

Learn about strategic and tactical uses for ETFs, including asset and sub-asset allocation, portfolio completion, cash equitization and more.

Your use of this site signifies that you accept our terms and conditions of use and privacy policy.

© 2022 VIGM, S.A. DE C.V. Asesor en Inversiones Independiente (“Vanguard Mexico”). All rights reserved.

This website is for institutional and sophisticated investors only. Vanguard Mexico will not have any responsibility for the use given to the information contained in this website.

Vanguard Mexico registration number: 30119-001-(14831)-19/09/2018. The registration of Vanguard Mexico before the Comisión Nacional Bancaria y de Valores (“CNBV”) as an Asesor en Inversiones Independiente is not a certification of Vanguard Mexico’s compliance with regulation applicable to Advisory Investment Services (Servicios de Inversión Asesorados) nor a certification on the accuracy of the information provided herein. The supervision scope of the CNBV is limited to Advisory Investment Services only and not all services provided by Vanguard Mexico.

The content of this website is solely for informational purposes and does not constitute an offer or solicitation to sell or a solicitation of an offer to buy any security, nor shall any such securities be offered or sold to any person, in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that jurisdiction. Reliance upon information in this website is at the sole discretion of the recipient.

Securities information provided in this website must be reviewed together with the offering information of each of the securities which may be found on Vanguard’s website:https://www.vanguardsouthamerica.com/en/products/financial-products or www.vanguard.com

Vanguard Mexico may recommend products of The Vanguard Group Inc. and its affiliates, and such affiliates and their clients may maintain positions in the securities recommended by Vanguard Mexico.

The information contained in this website derived from third-party sources is deemed reliable, however Vanguard Mexico and The Vanguard Group Inc. are not responsible and do not guarantee the completeness or accuracy of such information.

You may leave Vanguard South America’s website when you access certain links on this website. In so doing, you may be proceeding to the site of an organization that is not regulated under the Mexican regulation. Vanguard Mexico has not examined any of these websites and does not assume any responsibility for the contents of such websites nor the services, products or items offered through such websites.

The information contained in this website should not be considered as an investment recommendation, a recommendation can only be provided by Vanguard Mexico upon completion of the relevant profiling and legal processes.

This website is for educational purposes only and does not take into consideration your background and specific circumstances nor any other investment profiling circumstances that could be material for taking an investment decision. We recommend getting professional advice based on your individual circumstances before taking an investment decision.

The information contained herein does not constitute an offer or solicitation and may not be treated as such in any jurisdiction where such an offer or solicitation is against the law, or to anyone for whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so.