An order that a trader places for the purpose of buying or selling an option. When placing an option order, a trader must make certain to provide the broker with a set of trading instructions including:

• The market side: buy or sell.
• The order timing with respect to a trading session: an opening purchase, a closing purchase, an opening sale, or a closing sale.
• The desired number of option contracts.
• The price at which the trader wishes to buy or sell the option.
• The option specifications such as the trading month and year, the exercise price, etc.
• The exchange through which the trader wishes to place the order if more than one exchange lists the option.
• The stop loss level or the price at which the trader wishes to exit a losing trade.

Typically, there are several types of orders that can be placed with a broker, depending upon the trader’s outlook, expectations, and preferences. Some orders are sought to determine the place or the time to buy or sell an option contract, while others are meant to provide protection on an existing market position. With the exception of good-til-canceled (GTC) orders, all the most common orders are day orders, that is, if they are not executed by the end of the trading day, they are canceled. Although not all order types are available on all exchanges, the most popular types of option orders include: market orders, limit orders, stop orders, stop-limit orders, market-if-touched order, limit- or market-on-open order, limit- or market-on-close order, fill-or-kill order, cancel, good-til-canceled orders, spread orders, etc.