DEFINING ABOVE AND BELOW THE MARKET

In this blog Global Market Astro has taken initiative to explain the common terms used in day to day market activities. We have explained the blog readers regarding “Above the market” and “Below the market” in simple words easily understood by the users.

ABOVE THE MARKET

“Above the market” may be defined as an order to buy or sell at a price chosen and set higher than the current market price value of a security.

Examples of above the market orders are: a limit order to sell, a stop order to buy, or a stop-limit order to buy.

This is approach that is regularly used by momentum traders. For example, a stop order would be placed above the resistance level to buy. If the security's price breaks through the resistance level, the investor may be able to participate in the upward trend.

BELOW THE MARKET

“Below the Market” is defined as an order to buy or sell a security at a price that is lower than the current market price value. For example, a trader can place a limit order to buy a stock at a specified price that is below the current price. Below the market, helps ensure that the desired price, or better, is achieved. 

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

Traders and investors who want to attain a better price or position may enter an order to purchase below the market. A limit order to buy allows traders to specify the value at which they are ready to buy 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.

Source : https://www.globalmarketastro.com/blog/above-and-below-the-market/