Keep these 3 tips in mind.
- Be cautious about trading during periods of market volatility. Market conditions can affect bid-ask spreads—the difference between the price at which an investor can sell a security and the higher price required to buy the same security.
- Consider what order type to use, particularly at market open. As you place orders in volatile markets, keep in mind that market orders usually execute immediately and that factors such as order size, news, and market conditions can cause prices to fluctuate. This risk is particularly relevant at market open. Placing a limit order allows you to set an upper or lower limit on the amount you’re willing to pay or accept for a stock. There’s no guarantee your order will execute.
- Be aware that trading may be halted. If the S&P Index falls below certain thresholds, trading may be temporarily halted. You should be aware of those thresholds before placing your trades.
All investing is subject to risk, including the possible loss of the money you invest.