Stock trading in Singapore refers to the buying and selling company stocks or shares. It has become an integral part of investing in the stock market, with investors looking to make profits by taking advantage of price movements in individual stocks and broader changes in the overall stock market.
When engaging in stock trading, an investor will face two main types of orders: market orders and limit orders. Knowing the differences between these two order types can help investors in Singapore make more informed decisions when carrying out their trades.
What are market orders?
Market orders are typically used when investors want to trade a stock or security at the current market price. This type of order guarantees that you will receive your desired quantity at whatever price the security is being sold for at the time of your order. The main advantage of market orders is that they will be filled quickly, allowing investors to take advantage of opportunities in the Singaporean market as soon as possible.
The downside to using a market order is that it can sometimes lead to a low price than expected. Prices can fluctuate quickly and drastically, meaning the price you receive may be much higher or lower than anticipated. It could result in losses if prices move against you before your trade has been filled.
What are limit orders?
Limit orders are used when investors want to buy or sell a stock in Singapore at a specific price or better. Your stock order will only be filled if the stock reaches this target price.
The main advantage of this type of order is that it allows investors to buy and sell stock at a comfortable price, which can help them avoid losses if the market moves against them. This type of order also gives you more control over the timing of your order, as it will remain in effect until either your trade is completed or you cancel the order.
On the other hand, limit orders may only be filled if the stock reaches your target price. They are also more time-consuming than market orders as they require manual entry by an investor rather than being automatically executed.
How to start trading stocks in Singapore
Trading stocks in Singapore is becoming increasingly popular as more investors seek new opportunities to increase their wealth. With the country’s strong economy, friendly regulatory environment and access to international markets, Singapore is an excellent place to start investing in the stock market.
The first step in trading stocks in Singapore is to open a stock trading account with a locally licensed financial institution like Saxo Capital Markets PTE. Opening an account requires submitting personal information, including your name, residential address, contact details and income. Once you have opened your trading account, you must fund it with cash or other securities before you can begin trading.
Researching the different types of stocks available on the Singapore Exchange (SGX) is essential. Stocks are typically classified according to the sector (such as technology or healthcare), industry (such as banking or retail) and size (large-cap, mid-cap and small-cap). You should also consider what type of order you want to use when making trades; market orders are executed immediately at current prices, while limit orders allow you to declare the highest or minimum purchase price.
Once you have chosen your stocks and order type, you can start placing trades on SGX using your brokerage account. All trades must be placed through a registered exchange participant or stockbroker who will facilitate the transaction between buyers and sellers. You must understand all applicable fees that may be charged when trading stocks, such as commission fees charged by brokers, stamp duties imposed by governments and clearing fees incurred by exchanges.
Keeping up-to-date with the latest news on companies whose stock you are interested in buying or selling is always advisable. Following company reports and industry developments can help inform your decisions on when to buy and sell stocks for profit. You can also refer to guides comparing different stocks or classes of stocks to get a better understanding of what you are about to invest in.
Conclusion
Investing in stocks in Singapore is a great way to grow your wealth, and understanding the difference between the two types of orders is critical to successfully trading stocks on SGX. Market orders are ideal for investors who seek quick execution, while limit orders allow more control over pricing but may only be filled if the target price is reached.
Finally, keeping up-to-date with news on companies you’re interested in buying or selling can help inform decisions when trading stocks. With the proper knowledge and guidance, stock investment in Singapore can be a rewarding experience.
