If Done Order

The concept of “if done order” involves the combination of two orders that can be placed together in case a trader is unable to monitor the market at a regular basis but is willing to react along with the market movements to get the best out of investments and to avoid loss.

The “if done order” includes entering a position and setting up a stop loss. This type of order can be placed in conjunction with a stop or limit order only and the order (if done order) will be activated only after the limit order or initial stop has been executed. In other words, the second order is not going to be activated until and unless the first order is executed.

How does it work?

Let’s take an example to see how this works. Let’s say an investor placed a “limit order” to sell 3000 ABC at $5.50. Now the investor has decided to place another “stop order” to buy 3000 ABC at $5.75 to avoid the possible loss considering the fact that the price of ABC can rise. Now, the second trade will depend on whether the first trade is taking place. Once the first order gets triggered through market trades, the second order becomes active or pending.