Below The Market

AAA

DEFINITION of 'Below The Market'

An order to buy or sell a security at a price that is lower than the current market price. For example, a trader can place a limit order to buy a stock at a specified price that is below the current price. The order would only be filled if the specified price or better was available. While order execution is not guaranteed, placing an order in this manner, below the market, helps ensure that the desired price, or better, is achieved.


Can also be a price or rate that is lower than the current prevailing conditions in an open market. Goods or services that are offered at a lower price than the "going," or typical, rate can be said to be below the market.

INVESTOPEDIA EXPLAINS 'Below The Market'

Traders and investors who want to try to achieve a better price or position may enter an order to buy below the market. A limit order to buy allows traders to specify the price at which they are willing to purchase a security; if the limit order to buy is filled, the order will be filled at the specified price or better. A below market order to sell allows traders to quickly unload a position.


Real estate properties are sometimes sold at below the market values, meaning they are offered at lower prices than comparable properties. Such properties are called BMV, below market value. Properties may be sold below their market value when the owners are faced with some type of financial difficulty such as bankruptcy, divorce, probate or if they must relocate quickly.

RELATED TERMS
  1. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches ...
  2. Limit Order

    An order placed with a brokerage to buy or sell a set number ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop ...
  4. Above The Market

    An order to buy or sell at a price set higher than the current ...
  5. Stop Order

    An order to buy or sell a security when its price surpasses a ...
  6. Market Order

    An order that an investor makes through a broker or brokerage ...
RELATED FAQS
  1. Why can't I enter two sell orders on the same stock?

    To answer this question, let's look at a few different situations. You bought a stock for $10 but want to be able to protect ... Read Full Answer >>
  2. Are stop orders only used for stocks?

    Stop orders can be used for a variety of securities and are not limited to stocks. They can be extended to other securities, ... Read Full Answer >>
  3. Should I enter a limit order to buy a position with a bid and ask that are far apart?

    You face the risk of losing the spread in a security with a bid and ask that are far apart when you enter a market order. ... Read Full Answer >>
  4. When should I use a trailing stop order?

    Trailing stop orders are used to limit losses and protect profits on a stock position. You should use trailing stop orders ... Read Full Answer >>
  5. How can I use a stop order to limit my losses on a long stock position?

    A stop order is a useful order type when you are trying to limit losses on your long stock position. When you are long a ... Read Full Answer >>
  6. What is the difference between a stop and a market order?

    A stop order and a market order are different order types that dictate how to enter and execute trades. Traders and investors ... Read Full Answer >>
Related Articles
  1. Retirement

    Divorcing? The Right Way to Split Retirement Plans

    Mishandling how you define and allocate retirement-plan assets in a divorce can cost you plenty in taxes and aggravation. Here's how to do it right.
  2. Retirement

    Marriage, Divorce And The Dotted Line

    Does signing a prenuptial agreement put your marriage on shaky ground, or is it just smart planning?
  3. Retirement

    State Laws Dictate Division Of Joint Property

    In breakup, divorce or death, community or common law will determine how property is divided.
  4. Active Trading Fundamentals

    Trailing-Stop Techniques

    The important decision to exit a position must be based on more than emotion if you want to be a disciplined trader.
  5. Investing Basics

    Principal Trading and Agency Trading

    Ever wonder what happens behind the scenes when you buy or sell a stock? Read on and find out!
  6. Investing Basics

    Understanding Order Execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
  7. Active Trading Fundamentals

    A Look At Exit Strategies

    Setting appropriate exit points should help you avoid taking premature profits or running losses.
  8. Active Trading Fundamentals

    The Basics Of Trading A Stock

    Taking control of your portfolio means knowing what orders to use when buying or selling stocks.
  9. Active Trading Fundamentals

    The Stop-Loss Order - Make Sure You Use It

    It's a simple but powerful tool to help you implement your stock-investment strategy. Find out how.
  10. Investing Basics

    Explaining Buy Limit Orders

    A buy limit order allows traders and investors to specify the price that they are willing to pay for a security, such as a stock.

You May Also Like

Hot Definitions
  1. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  2. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  3. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  4. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  5. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center