Welcome to Orders and Strategies: the foundation of how trades actually happen in securities markets.
Exam Weight: This unit is part of Understanding Trading, Customer Accounts and Prohibited Activities. The full section accounts for 23 scored questions (31% of the exam). The official outline does not assign a separate question count to this unit.
What You'll Learn
- Market, limit, stop, and stop-limit orders plus time-in-force designations
- When a rep needs written authorization and the time/price exception
- Who initiated the trade and why it matters for suitability records
- How bid and ask prices work from buyer and seller perspectives
- The difference between principal and agency transactions and how firms get paid
- Owning securities vs. borrowing them and the risk profiles of each
- How to match a bullish or bearish market outlook to the right trading strategy
Why This Matters
Every securities transaction starts with an order. Understanding order types, trade mechanics, and basic strategies is tested heavily on the SIE exam and used daily in the securities industry. These concepts are the building blocks for more advanced topics like margin, settlement, and regulatory compliance.
Let's start with the different types of orders customers can place.