Usage of a sell stop order
It depends to some extent on how you interpret the situation, so I think this is the general idea. Say you purchase one share at $50, and soon after, the price moves up, say, to $55. You now have an unrealized profit of $5. Now, you can either sell and realize that profit, or hold on to the position, expecting a further price appreciation. In either case, you will consider the price change from this traded price, which is $55, and not the price you actually bought at. Hence, if the price fell to $52 in the next trade, you have a loss of $3 on your previous profit of $5. This (even though your net P&L is calculated from the initial purchase price of $50), allows you to think in terms of your positions at the latest known prices. This is similar to a Markov process, in the sense that it doesn't matter which route the stock price (and your position's P&L) took to get to the current point; your decision should be based on the current/latest price level.
As has already been mentioned, measure, change, measure.  Stopping vampiric power drain in the items you mentioned is going to save you very little electricity or money. There are much larger power users in your home that can be tackled first. If you have a fridge, freezer, and electric water heater on Time-Of-Use billing, shifting their energy usage to off-peak hours can yield significant monetary savings. I have put my water heater on a timer that turns the thing on 3 hours before I get up and shower, and turns off just before shower time. I get more than enough hot water for showers, and the heater isn't maintaining a tank of hot water during the day or night when I don't need it. Same can be done with your fridge and freezer. Set the fridge a little colder and run it off-peak and your food will stay cold/frozen during the day.  Note that while putting the water heater on a timer may get you both money and electricity, doing the same for the fridge and freezer will only get you financial savings as you time-shift your electric usage. I was able to get a 20% saving on my electric bill by time-shifting my water heater and fridge. Your mileage may vary. You should know when to sell your shares before you buy them. This is most easily done by placing a stop loss conditional order at the same time you place your buy order. There are many ways to determine at what level to place your stop losses at. The easiest is to place a trailing stop loss at a percentage below the highest close price, so as the price reaches new highs the trailing stop will rise. If looking for short to medium term gains you might place your trailing stop at 10% below the highest close, whilst if you were looking for more longer term gains you should probably place a 20% trailing stop. Another way to place your stops for short to medium term gains is to keep moving your trailing stop up to just below the last trough in an existing uptrend. The Limit Order are matched based on amount and time. The orders are listed Highest to Lowest on the Buy Side. The orders are listed Lowest to Highest on the Sell Side. If there are 2 Sell orders for same amount the order which is first in time [fractions of milliseconds] is first.  The about is the example as to how the orders would look like on any exchange.  Now the highest price the buyer is ready to pay is 20.21 and the lowest price a seller is ready to sell for is 20.25. Hence there is no trade. Now if a new Buy order comes in at 20.25, it matches with the sell and the deal is made. If a new Buy order comes in at 20.30, it still matches at 20.25. Similarly if a Sell order come in at 20.21, it matches and a deal is made. If a Sell order come in at 20.11, it still matches 20.21.   Incase of market order, with the above example if there is a Buy order, it would match with the lowest sell order at 20.25, if there is not enough quantity , it would match the remaining quantity to the next highest at 20.31 and continue down. Similarly if there is a Sell market order, the it would match to the maximum a seller is ready to buy, ie 20.21, if there is not sufficient buy quantity at 20.21, it will match with next for 20.19   If say there are new buy order at 20.22 and sell orders at 20.24, these will sit first the the above queue to be matched. In your above example the Lowest Sell order was at 20.10 at time t1 and hence any buy order after time t1 for amount 20.10 or greater would match to this and the price would be 20.10. However if the Buy order was first ie at t1 there was a buy order for 20.21 and then at time later than t1, there is a sell order for say 20.10 [amount less than or equal to 20.21] it would match for 20.21. Essentially the market looks at who was the first to sell at lower price or who was the first to buy at higher price and then decide the trade.  Edit [To Clarify xyz]: Say if there is an Sell order at $10 Qty 100. There is a buyer who is willing to pay Max $20 and is looking for Qty 500. Your key assumption that the Buyer does not know the current SELL price of $10 is incorrect. Now there are multiple things, the Buyer knows the lowest Sell order is at $10, he can put a matching Buy order at $10 Qty 100, and say $11 Qty 100 etc. This is painful. Second, lets say he puts a Buy order at $10 Qty 100, by the time the order hits the system someone else has put the trade at $10 and his order is fulfilled. So this buyer has to keep looking at booking and keep making adjustments, if its a large order, it would be extremely difficult and frustrating for this Buyer. Hence the logic of giving preference. The later Buy order says ... The Max I can pay is $20, match eveything at the current price and get the required shares. "if it opens below my limit order  What exactly are you trying to achieve here? If your limit order is for 100 and the stock opens ""below"" your limit order, say 99, then it is obviously going to buy it automatically.  also place a stop loss on the same order  Most brokers allow limit + stop loss order at the same time on same order.  What I conclude from your question is that you're with a broker that is using obscure technology. Get a better broker or maybe, retry phrasing your question correctly." Yes, theoretically you can flip the shares you agreed to buy and make a profit, but you're banking on the market behaving in some very precise and potentially unlikely ways.  In practice it's very tricky for you to successfully navigate paying arbitrarily more for a stock than it's currently listed for, and selling it back again for enough to cover the difference.  Yes, the price could drop to $28, but it could just as easily drop to $27.73 (or further) and now you're hurting, before even taking into account the potentially hefty commissions involved. Another way to think about it is to recognize that an option transaction is a bet; the buyer is betting a small amount of money that a stock will move in the direction they expect, the seller is betting a large amount of money that the same stock will not.  One of you has to lose.  And unless you've some reason to be solidly confident in your predictive powers the loser, long term, is quite likely to be you. Now that said, it is possible (particularly when selling puts) to create win-win scenarios for yourself, where you're betting one direction, but you'd be perfectly happy with the alternative(s).   Here's an example.  Suppose, unrelated to the option chain, you've come to the conclusion that you'd be happy paying $28 for BBY.  It's currently (June 2011) at ~$31, so you can't buy it on the open market for a price you'd be happy with.  But you could sell a $28 put, promising to buy it at that price should someone want to sell it (presumably, because the price is now below $28). Either the put expires worthless and you pocket a few bucks and you're basically no worse off because the stock is still overpriced by your estimates, or the option is executed, and you receive 100 shares of BBY at a price you previously decided you were willing to pay.  Even if the list price is now lower, long term you expect the stock to be worth more than $28.  Conceptually, this makes selling a put very similar to being paid to place a limit order to buy the stock itself. Of course, you could be wrong in your estimate (too low, and you now have a position that might not become profitable; too high, and you never get in and instead just watch the stock gain in value), but that is not unique to options - if you're bad at estimating value (which is not to be confused with predicting price movement) you're doomed just about whatever you do. There are a few scenarios I see possible:  1. Risk parameters in the algo were set very conservatively. Putting quotes out and canceling them is very common.   2. It was looking to exploit situations where someone rips through the book with a market order.  3. It was reacting too slowly to signals, and chasing opportunities that had already passed.   Other comments: What do you believe front running is? Your version differs from the textbook definition.   Quote taxes are more effective than minimum order durations. I wrote about how that works in a previous post in this thread. "There are two distinct questions that may be of interest to you. Both questions are relevant for funds that need to buy or sell large orders that you are talking about. The answer depends on your order type and the current market state such as the level 2 order book. Suppose there are no iceberg or hidden orders and the order book (image courtesy of this question) currently is:  An unlimited (""at market"") buy order for 12,000 shares gets filled immediately: it gets 1,100 shares at 180.03 (1,100@180.03), 9,700 at 180.04 and 1,200 at 180.05. After this order, the lowest ask price becomes 180.05 and the highest bid is obviously still 180.02 (because the previous order was a 'market order'). A limited buy order for 12,000 shares with a price limit of 180.04 gets the first two fills just like the market order: 1,100 shares at 180.03 and 9,700 at 180.04. However, the remainder of the order will establish a new bid price level for 1,200 shares at 180.04. It is possible to enter an unlimited buy order that exhausts the book. However, such a trade would often be considered a mis-trade and either (i) be cancelled by the broker, (ii) be cancelled or undone by the exchange, or (iii) hit the maximum price move a stock is allowed per day (""limit up""). Funds and banks often have to buy or sell large quantities, just like you have described. However they usually do not punch through order book levels as I described before. Instead they would spread out the order over time and buy a smaller quantity several times throughout the day. Simple algorithms attempt to get a price close to the time-weighted average price (TWAP) or volume-weighted average price (VWAP) and would buy a smaller amount every N minutes. Despite splitting the order into smaller pieces the price usually moves against the trader for many reasons. There are many models to estimate the market impact of an order before executing it and many brokers have their own model, for example Deutsche Bank. There is considerable research on ""market impact"" if you are interested. I understand the general principal that when significant buy orders   comes in relative to the sell orders price goes up and when a   significant sell order comes in relative to buy orders it goes down. I consider this statement wrong or at least misleading. First, stocks can jump in price without or with very little volume. Consider a company that releases a negative earnings surprise over night. On the next day the stock may open 20% lower without any orders having matched for any price in between. The price moved because the perception of the stocks value changed, not because of buy or sell pressure. Second, buy and sell pressure have an effect on the price because of the underlying reason, and not necessarily/only because of the mechanics of the market. Assume you were prepared to sell HyperNanoTech stock, but suddenly there's a lot of buzz and your colleagues are talking about buying it. Would you still sell it for the same price? I wouldn't. I would try to find out how much they are prepared to buy it for. In other words, buy pressure can be the consequence of successful marketing of the stock and the marketing buzz is what changes the price." "Most of the investors who have large holdings in a particular stock have pretty good exit strategies for those positions to ensure they are getting the best price they can by selling gradually into the volume over time. Putting a single large block of stock up for sale is problematic for one simple reason: Let's say you have 100,000 shares of a stock, and for some reason you decide today is the day to sell them, take your profits, and ride off into the sunset.  So you call your broker (or log into your brokerage account) and put them up for sale.  He puts in an order somewhere, the stock is sold, and your account is credited. Seems simple, right?  Well...not so fast. Professionals - I'm keeping this simple, so please don't beat me up for it! The way stocks are bought and sold is through companies known as ""market makers"".  These are entities which sit between the markets and you (and your broker), and when you want to buy or sell a stock, most of the time the order is ultimately handled somewhere along the line by a market maker.  If you work with a large brokerage firm, sometimes they'll buy or sell your shares out of their own accounts, but that's another story. It is normal for there to be many, sometimes hundreds, of market makers who are all trading in the same equity.  The bigger the stock, the more market makers it attracts.  They all compete with each other for business, and they make their money on the spread between what they buy stock from people selling for and what they can get for it selling it to people who want it. Given that there could be hundreds of market makers on a particular stock (Google, Apple, and Microsoft are good examples of having hundreds of market makers trading in their stocks), it is very competitive.  The way the makers compete is on price.  It might surprise you to know that it is the market makers, not the markets, that decide what a stock will buy or sell for. Each market maker sets their own prices for what they'll pay to buy from sellers for, and what they'll sell it to buyers for.  This is called, respectively, the ""bid"" and the ""ask"" prices.  So, if there are hundreds of market makers then there could be hundreds of different bid and ask prices on the same stock.  The prices you see for stocks are what are called the ""best bid and best ask"" prices.  What that means is, you are being shown the highest ""bid"" price (what you can sell your shares for) and the best ""ask"" price (what you can buy those shares for) because that's what is required.  That being said, there are many other market makers on the same stock whose bid prices are lower and ask prices are higher.  Many times there will be a big clump of market makers all at the same bid/ask, or within fractions of a cent of each other, all competing for business.  Trading computers are taught to seek out the best prices and the fastest trade fills they can. The point to this very simplistic lesson is that the market makers set the prices that shares trade at.  They adjust those prices based (among other factors) on how much buying and selling volume they're seeing.  If they see a wave of sell orders coming into the system then they'll start marking down their bid prices.  This keeps them from paying too much for shares they're going to have to find a buyer for eventually, and it can sometimes slow down the pace of selling as investors and automated systems notice the price decline and decide to wait to sell.  Conversely, if market makers see a wave of buy orders coming into the system, they'll start marking their ask prices up to maximize their gains, since they're selling you shares they bought from someone else, presumably at a lower price.  But they typically adjust their prices up or down before they actually fill trades.  (sneaky, eh?) Depending on how much volume there is on the shares of the company you're selling, and depending on whether there are more buyers than sellers at the moment, your share sell order may be filled at market by a market maker with no real consequence to the share's price. If the block is large enough then it's possible it will not all sell to one market maker, or it might not all happen in one transaction or even all at the same price. This is a pretty complex subject, as you can see, and I've cut a LOT of corners and oversimplified much to keep it comprehensible.  But the short answer to your question is -- it depends. Hope this helps. Good luck!"