ORDER PLACEMENT GUIDELINES

EXPLANATION HOW IT IS
ORDER TYPES ABBREV. MUST SPECIFY EXAMPLE
OF ORDER PLACED

Market Order1 MKT 1. Buy or Sell Buy/ Sell order, N/A Buy 7 Feb 2002
2. Number of contracts regardless of Gold at market
3. Commodity price
4. Month/Year

Market On MOO 1. Buy or Sell Buy/ Sell order, Buy/ Sell placed Buy 7 March
Open2 2. Number of contracts regardless of prior to market 2003 Silver on
3. Commodity price open open
4. Month/Year

Market On MOC 1. Buy or Sell Buy/ Sell order, Buy/ Sell placed Buy 7 December
Close3 2. Number of contracts regardless of prior to market 2003 SP on close
3. Commodity price open
4. Month/Year

Market If MIT 1. Buy or Sell Buy/ Sell when Buy MIT placed Buy 7 March
Touched4 2. Number of contracts market price below market, 2002 Copper at
3. Commodity touched Sell placed 78.00 MIT
4. Month/Yr. above
5. MIT price

Stop Order5 STP 1. Buy or Sell Buy/ Sell when Buy Stops placed Buy 7 Nov 2002
2. Number of contracts the market hits above market, Oil on a Stop
3. Commodity stop Sell placed
4. Month/Yr. Below
5. Stop Price

Limit Order6 LMT 1. Buy or Sell Buy/ Sell at a Buy Limit below Buy 7 Dec 2002
2. Number of contracts stated price or market, Sell Lean Hogs at
3. Commodity better above market 50.00 on Limit
4. Month/Yr.
5. Limit Price

Stop Limit STP 1. Buy or Sell Buy/ Sell with a Buy Stops placed Buy 7 May 2003
Order7 2. Number of contracts stop limit order above market, Corn 2.50 Stop
3. Commodity Sell Placed Be- Limit 2.52
4. Month/Yr. low + Specify
5. Stop Price limit
6. Limit Price

Order Cancels OCO 1. Buy or Sell 2 Orders of Placed 2 order Buy 7 Feb 2002
Other8 2. Number of contracts Buys or Sells Or with a combina- Gold 300 Limit
3. Commodity Combined tion of orders OCO MOC
4. Month/Year above one will
cancel Other

Fill or Kill FOK 1. Buy or Sell Order must be N/A Buy 1 Dec 2002
Order9 2. Number of contracts filled immedi- Minse at 850.00.
3. Commodity ately or it gets
4. Month/Year cancelled.

Good Til GTC 1. Buy or Sell Keeps the order Placed with Buy 7 Swiss
Canceled10 2. Number of contracts in place until any buy or sell Francs at 50.00
3. Commodity cancelled orders GTC
4. Month/Yr.
ADDITIONAL EXAMPLES

1
Market Orders:

Placing an order to buy or sell to where the current market is trading is called a Market Order. THERE IS NO SPECIFIED PRICE
FOR THE MARKET ORDER. Governed by the CFTC and exchange rules, Floor brokers are to give you the best possible service. How-
ever, you don’t have control over the market. Because they have the highest priority levels, Market orders get filled first. When you
place a market order, it should be executed within 2-3 minutes that the floor recieves it.

Example: Gold is trading at 300.00. You place a BUY MARKET ORDER. Two minutes later, the market is trading at 295.00. Your order
is executed and you are filled at 295.00. (see diagram 1.0)

diagram 1.5

MARKET ORDER EXAMPLE

Market Trading @-----------------------------> 300.00 YOU PLACE ORDER HERE.

2 Min. Later @-----------------------------> 295.00

YOUR ORDER GETS FILLED, HERE.

RISK DISCLOSURE: Futures trading contains substantial risk, is not for every trader, and only risk capital should be used. Margins are subject to change. Past
performance is not indicative of future results.
ADDITIONAL EXAMPLES (cont’d)

5
Stop Orders:

Stop orders become market orders when a particular price level is reached. Stop orders are mainly used to protect or close out profitable positions.
Also can be used to initiate positions (However, this is rare.) If the market moves against you, your sell stops are hit. They become market orders
and you offset your positions.

Example: You find a commodity, (lets say “US DOLLAR INDEX”, DXZ2) that you are looking to buy or sell. The market is currently trading at 50.00.
You place a Buy Stop Order at 75.00. This means that the order becomes a market order at 75.00, and the order will then be executed. It can be filled
AT or ABOVE 75.00. Buy Stop Orders must be placed anywhere ABOVE the current market price. On the other hand when placing a Sell Stop Order
with your broker you would place it anywhere BELOW the current market price. For example you place a Sell Stop Order for DXZ2 at 30.00. When
DXZ2 is AT or BELOW 30.00, your Sell Stop Order will be executed. (see diagram 1.5)

Why would I place a Buy Stop Order? Why would I place a Sell Stop Order?

1. To protect a major loss in an open short position. 1. To protect a major loss in an open long position.
2. To initiate a buy position. (very rarely) 2. To initiate a sell position. (very rarely)

diagram 1.5

STOP ORDER EXAMPLE

375.00

BUY STOP ORDER EXECUTED @325.00 AND ABOVE

Buy Stop @-----------------------------> 325.00

Market Trading @-----------------------------> 300.00

Sell Stop @-----------------------------> 275.00

SELL STOP ORDER EXECUTED @275.00 AND BELOW

250.00

RISK DISCLOSURE: Futures trading contains substantial risk, is not for every trader, and only risk capital should be used. Margins are subject to change. Past
performance is not indicative of future results.
ADDITIONAL EXAMPLES (cont’d)

6
Limit Orders:

Limit orders are used for entering the market at a specified place. Buy limit orders are placed below where the market is trading. Sell
limit orders are placed above where the market is trading. If the market never reaches the designated price, the Limit Orders cannot
be filled.
In order to execute a Limit Order, the price of the market has to go THROUGH the limit price. *LIMIT ORDERS do NOT have to be
filled at the price of the order.* Buy Limit Orders are placed below and Sell Limit Orders are placed above the market.

Example: Gold is trading at 300.00. You want to enter a BUY LIMIT ORDER for gold at 275.00. If the market trades BELOW, 275.00,
your Buy Limit Order will be executed. The exact opposite is true for a SELL LIMIT ORDER. You want to enter a SELL LIMIT ORDER
for gold at 325.00. If the market trades ABOVE, 325.00, your Sell Limit Order will be executed. (see diagram 1.6)

diagram 1.6

LIMIT ORDER EXAMPLE

350.00

SELL LIMIT ORDER EXECUTED @325.00 AND ABOVE

SELL LIMIT @-----------------------------> 325.00

Market Trading @-----------------------------> 300.00

BUY LIMIT @-----------------------------> 275.00

BUY LIMIT ORDER EXECUTED @275.00 AND BELOW

250.00

RISK DISCLOSURE: Futures trading contains substantial risk, is not for every trader, and only risk capital should be used. Margins are subject to change. Past
performance is not indicative of future results.
ADDITIONAL EXAMPLES (cont’d)

7
Stop Limit Orders:

Stop limit orders are used to trade within a certain price range. Stop Limit Orders have two prices – a stop and a limit. The worst price
an order can be executed at is the limit level and the best price is the stop level. For protection in fast moving markets, Stop Limit
Orders are sometimes used.

BUY STOP LIMIT ORDER: Gold is trading at 300.00. You want to enter a BUY STOP LIMIT ORDER for gold. The STOP PRICE for the
buy order would be placed at 325.00; this is where your order becomes a market order. You place a STOP LIMIT price for the buy at
350.00. This price is the maximum your order can be filled at. Any price ABOVE 350.00, your order cannot be filled, hence the limit.
The difference between a STOP ORDER and a STOP LIMIT ORDER is STOP LIMIT ORDERS protect you against being filled at a price
far away from the original price. (see diagram 1.7)

SELL STOP LIMIT ORDER: Gold is trading at 300.00. You want to enter a SELL STOP LIMIT ORDER for gold. The STOP PRICE for the
sell would be placed at 275.00; this is where your order becomes a market order. You place a STOP LIMIT price for the sell at 250.00.
This price is the minimum your order can be filled at. Any price BELOW 250.00, your order cannot be filled, hence the limit. (see
diagram 1.7)

**STOP LIMIT ORDERS ARE NOT GAURANTEED TO BE FILLED.

diagram 1.7

STOP LIMIT ORDER EXAMPLE

BUY STOP LIMIT ORDER CANNOT BE EXECUTED ABOVE 375.00

Buy Stop Limit @-----------------------------> 375.00

BUY STOP LIMIT ORDER CAN BE EXECUTED IN THIS RANGE*

BUY STOP EXECUTED @325.00 AND ABOVE

Buy Stop @-----------------------------> 325.00

Market Trading @-----------------------------> 300.00

Sell Stop @-----------------------------> 275.00

SELL STOP EXECUTED @275.00 AND BELOW

SELL STOP LIMIT ORDER CAN BE EXECUTED IN THIS RANGE**

Sell Stop Limit @-----------------------------> 250.00
SELL STOP LIMIT ORDER CANNOT BE EXECUTED BELOW 250.00

RISK DISCLOSURE: Futures trading contains substantial risk, is not for every trader, and only risk capital should be used. Margins are subject to change. Past
performance is not indicative of future results.