foreign salutations those of us joining Nathan and I for his 30-minute coaching call who knows we may run over it's not a tight 30 minutes uh but what he wanted to discuss in his coaching call is a type of order so we do a drawing every Tuesday at the conclusion of our live stream so if you'd like to enter that drawing for a coaching call just join us Tuesday night 5 PM Las Vegas time from My Fabulous studio in Las Vegas so uh let's get started I think Nathan did a lot of people get hung up and thinking there's a zillion types of orders and there is not there's only two they are Market orders and they are limit orders now granted within that category there's a lot of other qualifiers or contingencies you can add to an order but again if you uh are more interested in execution than you are any other thing you would just say Market order I want immediate execution best available price I'm more interested in getting it now than I am about the price I'm having a cabin built and I'm having my contractor not understand that I'm not interested in Saving a couple bucks if I have to wait 30 days I'd already just suck it up write a bigger check and make them all keep moving out of you so you know he's well you know if you wait and you get these panels for six weeks from today and you know I don't want the panels next week I want them right now so whatever it costs to go get them that's what I want to do so immediate execution best available price in a limit order you're saying you want to do business at your price or better now nobody has to do business with you at your price or better there's an implied as a buyer my price or less as a seller my price or more so uh last time I checked you know apple is at 175. that is the market price of Apple CNP means care market price yep and you'd be very very foolish right now with Apple at 175. to tell me that you would like to buy it at 178 or less I'd say Nathan you must be new I'm here for you you want to sell out one uh buy it at 178 I'll fill you I'll buy it at 175 I'll fill you 178 beats working for a living yes there are people that think they're doing you a favor to teach you things the hard way I said oh I bet Nathan missed that on his series seven the buy limits test question should be placed below the market price so it's very testable where we place orders in relationship to the current market price at a buy limit goes below the current market price you know I always used to joking on my broker said you buying the office lunch today I said I am buying the office lunch on a limit order of 500. yeah I'm an old school guy I carry a wad you know binder clip with a bunch of hundred dollar bills so I whip out five of them and say there you go lunch on me now if they come back and say Dina we fed all the office lunch and there's forty dollars left over wonderful there's an unapplied or better but if they come back and say Dean they need some more money I'm going to say well well guys I'm not good for anything over 500. because you're gonna have to take up a collection now you know if I gave them a market order for lunch they'd be willing pheasant under glass and for lunch right so here I'm telling them hey there's my limit the limit is you know five hundred dollars so if it's a sell limit again it'd be foolish for you to tell me with Apple at 175 that you would like to sell it at 173 or better I'd say well you must be new you know I'm here for you you want to sell a 173 you just sold it to me and I'll blow it out at 175. it would be who you to place your sell limit very testable where we place orders in relationship two the current market price to put that cell limit above the current market price so we'll sell limits test question are placed above the current market price well and the price is guaranteed here you're more interested in the price than you are execution you know if I can't do it for my price or less then I don't want to do it right and you know customers get confused about that all the time by the way anything customers get confused about is very testable because it's your job to unconfuse them right I'd expect you know the broker knows you know what's going on and sometimes people are really confused about what's going on here all right so the price is guaranteed uh but not filling the order is not so here's some examples of a market and limit order so here's a customer who said he wants to buy a thousand shares of XYZ at the market and again it means immediate execution best available price and I told you I'm demented I get upset when people don't understand it's a market order and I was at the airport I said listen I need my butt on that plane and they go well gee don't even know the cost I go it doesn't matter I've got to be out of here tonight so that's the last flight and you got me and then she went in well if you would have done this like two weeks ago and you would have done that online I go hey listen I just want my ticket it doesn't matter what this thing costs I need my butt on that plane now in a Cell limit here we have a settlement at 35. and one thing you should be able to do is interpolate or be able based on this scenario to tell me that x y z must be somewhere between 35 and 30. right because I know it must be somewhere between there because I know where orders are placed in relationship to the current market price I know that a cell limit has to be placed above and therefore I can Intuit that x y z is somewhere below 35. and I know that buy limit is placed below so I know that it's somewhere in there we don't know if it's like 31 or 32 or 33 but if somewhere in between those two numbers so then I got a quick uh questions on um like so like on a sell limit order um that has to get um like triggered first right once the price hits no no no common mistake I as as a tutor this is a coaching call not a tutoring session but as a tutor I am not concerned Nathan when people are confused in ways that a lot of people get confused I'm more worried about when you're all over the place I think what you're confusing is a settlement violent with a stop order okay the different thing so we're going to add another qualifier right now we have one qualifier and the only qualifier is your price or better yeah we do have and very testable we do have stop orders we're called stop orders because the number one use of a stop order is to stop a loss so now we're moving on and talking about stop orders stop orders or used test question to stop losses protect profits or create a stock position now as a test taker whenever there's three of a thing what can you stand by for except right so I say oh Nathan huh you're using a stop order you're trying to stop a loss protect a profit or establish a stock position you say well no I'm not nice well then you're confused my friend because those are the three uses of a stop order so now we're adding a qualifier a contingency and we're telling the broker if it trades at or through then pull the trigger your point earlier and make it either a market order or a limit order your choice about whether we want me to pull the trigger and make it a market order limit order you're saying if this then that if there's no this there's no that now remember in our two we just looked at a market order there was no contingency no qualifier in a limit order we had a contingency or qualifier our price are better now we're saying at or through then I want to either pull the trigger and have a live market order or a live limit order your choice I think of a stop order is a suspended order it may or may not ever become a market or a limit order so when we pull the trigger your point we got to be real careful about this when it trades out or through is it becoming a market or limit order because the scenarios are going to be different I'm going to show those to you I know you're excited right so once we pull the trigger again the order may not be triggered if we're looking at a sequence of Trades and there's no trade at or through well then that becomes live order two separate events two separate events customers get hung up on this all the time so you say Hey Dean I'm watching CNBC watching the tit tape the trades go by and I saw my trade I go Nathan that wasn't your trade that was a trade at or through the turns your suspended order into a live order two separate events so be careful when we're going through the sequence of Trades okay people get hung up that's my trading it's not your trade that is the trade that turns your suspended order your qualified order into live order all right well let's look now at some examples of this so now I got it in test phraseology here does phraseology investor sells short 100 ABC at 33 and places a buy stop at 35 very testable where we place orders in relationship to the current market price and buy stops are placed above the current market price very testable we follow the convention here you told the broker that if it trades at or through 35 then get you out of here stop the law stop the bleeding at approximately two hundred dollars approximately because we don't know what the next trade is going to be right now there's another thing you could do don't be a dumb bear here being a dumb bear would just be so short 133 expose yourself to unlimited risk but if you're worried about that price another kind of arrow in your quiver so to speak is to go long a call that's another way to hedge a short stock position right because you can save it yeah I want to be able to you know exercise that call contract all right test phraseology your investor sells 100 ABC short at 33 and places a buy stop at 35. the following trades then occur the following trades then occur and so now we're going to go through the sequence of Trades and we're going to see if it ever became a live order now please know we did follow the convention no our buy stop is above the car market price so now we're watching CNBC we're watching trades go by and it happened at 34.75 no remember we're looking for a trade at or through on a number line there's no way to go to 34.99 without going through 35. so we're looking for a trade of 35 or 35.99 or lower anything happen at 34.90 we're watching CNBC go by anything happen there no 34.80 anything happen nope now I just want to warn you Nathan that I asked you do you want to do this free form with a whiteboard yeah you said you'd rather do slides as we're using slides and what I would just want to warn you is that on the test there won't be a little arrow here that says Trigger or elected right right you have to bring that to the party yourself right I wish it said that yeah and then as we said two separate events yep right so that's not the customer's order again why is it testable because customers get confused all the time oh that's my order it's not your order this is your order and the reason there's a question marked there is because we don't know right we know what the next trade is you know that trades 34. if that trades 36 doesn't matter it's the customer's trade now outside of Series 7 Fantasyland you know good news Nathan when you pass your series seven you get to leave Series 7 Fantasyland I'm stuck here permanently no wonder I'm demented but on the series seven that next trade is the customer's trade in the real world there might be people ahead of him but on the task you would tell me that that's his trade all right let's try another one so we're trying to stop a loss we said we use these to stop losses protect profits or establish a stock position so I showed you a buy stop now I'm showing you a cell stop again very testable where we place orders in relationship two the current market price very adjustable we're following the convention here an investor buys 100 ABC at 33 and places a sell stop at 30. so I'm done my broker if this then that this is a contingent order it may never become a live market order so we're looking for a trade at or through 30. if this then that we followed our convention and then on the test we'll say the following trades then occur right the same thing now we got to go through the sequence of Trades and on the test we got to say did it ever become a live order and we said the way we do that the way we do that is we're looking for a trade at or through please note we did indeed follow the convention we placed our sell stop below the current market price following trades that occur nothing happens Works CNBC go by we're looking for trade out of 30. nothing happens nothing happens ding ding ding ding ding ding ding ding two separate events that is not the customer that's the order that turned the suspended order into a market order and so we don't know what that trade is doesn't matter if it's 31 doesn't matter if it's 29 it's the customer's trade now if you're worried about that another arrow in your quiver that you might have used instead is to buy a put that's another way to mitigate risk in a long stock position right so we bought the stock at 33 we placed a sell stop at 30. you know part of successful investing is letting your flowers bloom but more important pulling your weeds right and so here we're saying this thing is a weed if it goes 30 or lower I'm out I want to go home you know that's more important than you know the uh you know letting the flower boom compared to that all right well you say Dean I want to make it a limit order I say really that has really foolish my friend I understand what you're telling me you're saying now that if we pull the trigger you watch your price or better you know Nathan the problem with that is right now we only have one contingency at our through we go home now you're saying at or through but now you want your price or better you know the more contingencies or qualifiers you add to the order the less likely it is that that order is going to get executed right so now we gotta be a little more careful because when we're going through this sequence he may or may not accept that next trade because now the customer is saying Dean if it becomes live I want to turn into a limit order by the way it doesn't matter whether it's a buy stop that turns into a market order or a buy stop that turns into perhaps a limit order because remember we're never going to come live all cell stops are below and all buy stops are above whether they become Market orders or limit orders that's where they go and we're going to have a very very uh useful memory aid device about where we place orders in relationship to the current market price all right so here's a really dumb customer I'm joking but you know now that I'm not a broker yeah I can call it as I see it um buy stop load so an investor wants to buy the stock so you're telling me Dana if the stock trades out or through 25 I want to buy it but I don't want to pay more than 26. oh I think that's very foolish my friend you know right you know I used to have clients who give me a a buy stop limited to close and all or none and then they'd say well they go off I go what do you think you got like a half a dozen contingencies or qualifiers in there right my favorite order is a market order sometimes I say that but you know maybe not right so you know this could be careful if you get somebody Market order in your in a fancy place like you know I ordered a bottle of wine and that was you know and I said ah just give me your best stuff like oh and I started looking around I go man I better be careful when I say that where I'm at because who knows what comes up right uh here we follow the convention again as I mentioned it doesn't matter whether you want to buy stop that turns into limit order or a buy stop that turns into Market order the buy stop is placed above the current market price again very testable where we place orders in relationship to the current market price then we show you a sequence of Trades we're watching CNBC and now we've got to be a little careful again nothing happens here nothing happens here nothing happens here ding ding ding ding ding ding ding ding by the way that didn't have to be 25 that could have been 2501. that or through it becomes a live order now we got to be real careful here this is no longer a question mark because that may or may not be acceptable you know that's 2601 you'd say no 2602 no 26 ding ding ding ding so that we could carry this sequence out and we'd be looking for a trade of 26 or less because remember there's always an implied or better is a buyer year price or less right always an implied or better right so let's look now at a sell stop and again it doesn't matter whether it's a cell stop that I showed you previously that turns into a market order or a cell stop that turns a limit order doesn't matter cell stops are below the market and again it's on Dean's personal opinion you don't get tested on Dean's personal opinion but I just think it's foolish and the reason I think it's foolish adding contingencies upon contingencies qualifiers upon qualifiers is because the more contingency or qualifiers you add the less likely it is that the order is going to be what executed right remember the only order that has no contingency no qualifier is a market orders we notice we followed the convention here we said whether we want a sell stop that turns into a market order or a cell stop that turns into limit order it has to be placed below the current market price so they say your customer places a sell stop 25 a limited 24 the following trades then occur and then we got to go through the sequence of Trades anything happen nope nothing happened nope thing happened by the way it doesn't matter if that's 25 or 24.99 at or through it becomes a live order so ding ding ding ding ding ding and now we've got to be careful as a seller remember his price or more so if that next trade is 23.99 no execution 39.97 and 24 ding ding ding 2401 ding ding ding so again he remember as a seller wants 24. or more as a buyer you want your price or less as a seller you want your price or uh more and again you would be pleasantly surprised if that happens right you say oh thank you so much I can't stress to you how many points this memory aid device is worth and I'm sure you haven't encountered this I hope in this coaching call for the first time no I've seen this before all right so every time Nathan I think this fine thing has been mined for all the potential points you can get from it I'll do a debrief and say could I use my swamps or Bliss for that go as a matter of fact you could have so sometimes when you get like an order kind of a question you kind of kind of go say oh is there a hack available to me so the slobs or Bliss stands for where we place orders in relationship to the current market price you know the current market price let's say of apple right now is uh 178. yep and so as a seller of Apple if you want to use limit order that sell limit would go above the market and whether you want to buy stop or buy stop limit doesn't matter that's going to be above the market now I'm kind of lazy and so I don't even know slabs that were Bliss I just know Bliss and then I say well gee if it isn't Bliss it must be on the other side yep so buy limits are below and sells stop again whether you want to sell stop that turns into a market or sell stop turns the limit is below now when apple pays a dividend apple-based dividends the stock is going down on the X date by the amount of the dividend right and so you know let's say they hear boom let's put an order in here let's say that I have with my broker a uh buy stock give me a buy limit at one 77. so first play I say Nathan so you're telling me that if I can get you Apple today at 177. or less that you'd want to buy it you say yep I said well Nathan you know that order may or may not ever become live you know I had a customer once you put in a buy limit and it's a Monday and then nothing happened I called him Tuesday I said would you like to re-limit that reiterate and you know we re-entered it Wednesday I called him we enter Thursday call them and goes damn Dean why are you bothering me every day I said well test question all orders are considered day orders and so if nothing happens today Nathan we're starting fresh tomorrow and that's why I keep bothering you I said Nathan if you don't want me to bother you why don't you just make it a bilingual GTC good tell cancel and then I won't be checking in with you I said oh let's do that wonderful right so announce a buy limit GTC good deal cancel uh I say uh Nathan one thing you might want to consider is an alternative to a buy limit order I mean you're telling me you want to get it at your price or better what if I told you that somebody would pay you hundreds of dollars to do what you say you want to do which is by Apple [Music] um you know uh Nathan what I might want to do is get you approved to sell puts you know if we sell an apple uh 180 put 180 foot for four you say well Dean it's it's in the money I go absolutely because we want to get exercised right see we want somebody to stick it to us right somebody sticks it to us 180 we go well thank you so much I wanted the Apple anyways right uh Nathan breakeven's 170 uh six which is even better than your buy Limited 177. you said what if it's 180 or higher I said well then what expires we keep the money 400 bucks we don't get anything in this limit order I mean if we doesn't go off so I uh my our register option principal says why does Nathan want to sell puts one is I could say he's a Speculator and uh he's bullish on Apple and he thinks Apple's going to go 180 or higher and he's going to go neener Nina another answer is uh Nathan likes to write puts or sell puts or short puts on stocks that he's willing to own he wants to write puts as an alternative to a limit order says okay cool now my example of Apple my example of ample these orders that are below the market might accidentally be triggered on the X date because apple is going down on the X date sure for example if apple is going X let's say it's a dollar fifty dividend we would expect Apple to open up at 176 and a half right we would expect on the X date that's going to go down by that now by the way I'm not being facetious I'm terrible with arithmetic so I'm grabbing my calculator because God knows I don't want to make a arithmetic mistake that could cause me to miss a question when it's just basic math right so 178 minus one and a half so it should open up at 160 160 176 and a half that's what we would expect that to open up on the X date and as you can see if we didn't adjust orders below the market there's no way that an order above the market can be triggered because the stock is coming down based on the X date so we don't have to worry about adjusting slops because there's no way they would be accidentally be triggered but as you can see here if we didn't adjust test question orders below the market they might accidentally get triggered sure so very testable know that buy limits and sell stops are going to be adjusted for the X state so your buy limit at 177 is now minus 1.5 is going to become a buy limit minus 1.5 we're going to adjust that at 175 and a half so we're going to move that down we're going to adjust that for that dividend and that way it doesn't accidentally get triggered now some counselors don't like this they say The Amity and it's just too confusing for me to keep track of orders that are being adjusted or not and so if the customer wants he could say DNR on his orders DNR that does not mean do not resuscitate that means do not reduce so I know Nathan you normally would adjust my buy limits and sell stops for dividends cash dividends but I would prefer you not so DNR in that order that's what I'm telling you do not what reduce huh and as I said it's worth a lot of points this lob's over Bliss thing would that nod still like even if you have DNR on there wouldn't I still get triggered then yeah then when you about it what am I going to say well Nathan I told you that would happen you know and I'm joking you know I gotta be a little careful I'm getting to be the uh get off my lawn guy I had a a class and uh you know I think I said something like three times and I said didn't I just say that you know and I I got my evaluations and I said oh you know I think that was rude to you know tell me that you already said it and I'm like well what can I tell you you know I would prefer to be that guy or maybe you hear my voice in your head when you go to make some foolish mistake then you know uh not be that guy all right so uh that was our 30-minute coaching call uh well we didn't uh get done in this 30 minute coaching goal which I don't think is a big deal uh as we didn't talk about uh we do well I did I gave you time qualifiers Dave versus DTC and again I didn't go over uh how this would work but you know if I'm the designated Market maker in the stock you know what I'm gonna do is adjust uh clean up my order book in April October so unless you properly renew those with me then you know I'm going to cancel uh filler kill we didn't go for specialized orders like filler kill filler kill is when you want it all and you want it now immediate or cancel lag filler kill you want it all but two will accept partial execution all or none like filler kill you want it all but you're willing to wait I will continue on I'll finish this up since it's uh you know we're that close to being done with this discussion may as well finish it up um a couple test questions about Market not help uh first ask question is who has that you know on the participants of the New York Stock Exchange you need to tell me the floor broker has that the floor broker executes orders for clients of member firms so if I'm the floor broker for Morgan Stanley you say Hey Dean buy 10 000 GE Market not help you're telling me to go into the auction not tell anybody I have the order and Bam do whatever time and price I think looks good a couple of follow-on test question does my broker does my brokerage for Morgan Stanley in this case need to have discretion for me to give the Morgan Stanley floor broker a market not held order does that require discretionary Authority buy ten thousand shares GE Market not held go out in the crowd do it at whatever time and price you think looks good does that require discretionary Authority I don't think so because it has uh be confident be confident you're correct so you got to be confident on the test the Three A's are present right action asset amount so that does not that's a trust question right that doesn't require a discretionary authority to make a decision about time and price Mark are not held as an example of that okay it's an example of a situation which discretionary Authority is not required now here is the quote in the auction and that too is testable to know that the New York Stock Exchange can best be characterized as an auction order driven Market so what we're looking at here is a quote in the double auction buyers and sellers you know I find eBay to be kind of boring because it's a single-sided market all there is is sellers I think it'd be much more fun if I could show up on eBay as a buyer right you know one of my favorite bags you can't get in the primary Market anymore is a North Face gallero 3700 I love those bags I probably could Corner the market I probably got five in my garage right now and I would be willing to go on eBay and say if you have a North Face Vallejo 3700 here's my bid all I see on eBay are the asking prices right and every once in a while somebody say you know well you know what these costs knew I go yes I you know trust me if anybody knows about North Face Gallego 3700 it's me my family makes fun of me for the backpacks that I have I mean I don't travel as much as I used to because of govid but you know I'm gonna have to have a garage sale someday you know you're going to be all kinds of nice bags doomies and you know anyway so in this auction right now there's somebody who's willing to buy 500 shares at 29.91 and willing to sell 200 shares at 30. this doesn't represent a market maker this is not a bid an ask from a market maker who's willing to buy this into inventory at 29.91 and sell it 30. remember over the counter markets tell us why should not what we're discussing right now could best be described as a negotiated quote driven Market and that's not what we're talking about here we're talking about an auction order driven Market so you said you know what's happening in the auction right now I said well there's somebody who's willing to buy 500 shares of 29.91 and there's somebody willing to sell 200 shares at 30. and you say Dean Let's uh buy 300 XYZ 30 fill or kill Nathan it's a Kill as a buyer I'm going to match you with a seller and there's only 200 shares at 30. you know the person's asking for 30 for 200 you want 300 it's not available so it's a Kill you say Dean I want to buy 300 shares XYZ 30 a meteor cancel remember this is a limit order like I say Nathan we were able to pick up 200 of your shares at 30. right because remember you're a buyer so we're imagining it with a seller you're on that 30 is where you have to stay focused on that so you know what I tell customers or test takers is when they're looking at two prices you're going to be paying the high price and receiving the low price right so the buyer we're going to be using that integrity so you get 200 shares you call me say Hey Dean what's going on my 300 shares all or none I say well remember you said you want it all right now there's only 200 so it's still working we're hoping maybe another 100 shares shows up there if another person says they're willing to sell 100 shares of 30 that'd be the total of three and they get filled but right now there's only two but you said you were willing to wait and so right now nothing is happening right so that is a testable distinction in terms of what happens using fill or kill immediate cancel or all or not all right so in the over-the-counter Market that would be much much different about how that would work and that's where we ask you about uh you know the bid and the ask and don't back away from quotes and level one and level two and level three that NASDAQ that would be the transition all right any other questions from your coaching call today no I don't think so I was really confused I think on when we just went the the buy stops how that then is gets triggered and then it can either like I said I don't worry Nathan when people are confused how I've seen people get confused I get worried when somebody's confused in some way I've never seen I go wow no or they're inconsistent in what they're confused about like one time they're answering this way another time they're answered that way uh that gets a little harder to fix as well I'm going to send you the copy of the slides that we just used for this so you'll have that and uh as you know our coaching calls are recorded and shared so this will be available as a video shortly and then uh what else am I gonna send you well I'll send you that at least I'll send you the whole the whole slideshow that I actually use when I do that that slideshow uh comes from my four day series seven class so don't get intimidated but I'm going to send you the I the slide deck of the whole four days because you know I don't know how to cut it out right so you'll get one better than the class notes right so I'll send that to you all right anything else I think so thank you very much okay I'm sorry it took so long to get you done I mean I think you want the coaching all what two weeks ago or one week ago something like that yeah but yeah the cues so when's your test date by test day it's um I haven't said yet but I have to set it between September 20 and September oh perfect we'll get it yeah because your brain will do better once you have that test date so yeah get that right away and then I hope to see you on a Tuesday live stream either tomorrow or sometime between now whenever you're testing yeah I tune in so I'll see you then talk to you later