2.1.1.1.1 Buy and Sell Orders
A buy order is when an investor chooses to buy securities. Most investors will buy securities when they expect the price to go up. They wish to buy the security at a low price and sell it later at a higher price and profit from the appreciation in value. Buying a security is sometimes referred to as “going long” the security, and once the investor owns the security, the investor is said to be “long” the security. The maximum loss on a buy order is the price paid for the security.
A sell order is when an investor chooses to sell a security. An order must be specified as either “sell long” or “sell short.” A sell long order is when the investor sells securities that he owns. Another way of saying this is that the investor has a long position in the security and is going to sell.
A sell short order occurs when an investor sells