Above the market

Above the market is a type of ordering strategy where the trader is taking advantage of the momentum of the stock price. For instance, if a stock is trading at 56 a share and the trader buys the stock at the current price, this is called a market order. If the trader wants to take advantage of stock dips she will place a limit order of 55.80 a share, this is called below the market. Placing an above the market order is sometimes risky for short term traders as the stock price sometimes drops before going back up. However if the stock price is trading sideways, a trader can take advantage if the stock suddenly surges up by placing an above the market order at 56.20 a share.

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