In a fast-moving market, the price you see when you place your order could change dramatically by the time the order is executed. But during the day, the stock price moved dramatically. Some brokerage firms, concerned about volatility, require their customers to use limit orders in certain situations. Discount broker Charles Schwab requires customers to use limit orders when they invest in initial public offerings on the first day of trading. Schwab instituted the policy about a year ago in response to sharp swings in prices of IPOs.
Some discount brokers charge a higher commission for limit orders.
But Kurson says the benefits outweigh the costs. The margin call tolls for you Margin accounts give you more bang for your buck by letting you borrow your broker's money to buy shares. A margin account lets you invest right away, even if you don't have a lot of cash. If the stock takes off, you can pay off your loan and keep the rest. But when the market plunges, margin accounts can intensify your losses.