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Not many car buyers would turn down free safety features or convenient perks like cruise control. So why would any online investor do the same?

It may come as a surprise that all major discount brokerages provide a vast array of conditional orders - and they're included in the cost of the trading fee whether they're used or not.

In an age of rapid-fire markets and 24-hour global trading, markets can have the volatility of a superhighway in a snowstorm, but if you're asleep at the wheel, conditional orders could keep you on the road.

Conditional orders give do-it-yourself investors the ability to pre-program entry and exit strategies, which can automatically lock in gains and limit losses even when they're not at a computer.

Such tools make investors less vulnerable to market swings - and, perhaps more importantly, emotional swings.

The most common conditional order is the stop-loss, also known as a stop order or stop-market order. It can be used at the point of purchase to protect a potential profit when a stock has run up, or it can limit a possible loss.

For example, suppose you buy a stock at $10 a share. You hope it will rise in value but to be safe you place a stop-loss order at $8 a share. By doing this, you lower the risk by putting an automatic cap on losses at $2 a share.

If that same stock rises to $14 a share, you can then place a stop-loss order at $12 a share - locking in a profit of $2.

Locking in profit

Conditional orders are even more vital for short positions. Short selling is a way to profit from the decline in price of a security by borrowing shares at a higher price with the expectation it will drop, then buying the shares back at a lower price and keeping the difference.

With a short trade, there's no limit to how much a stock can rise so a buy-stop order can be placed to limit losses or lock in profit.

For example, if a short investor holds a position on a stock at $10 a share with the intention of it falling, he might place a buy-stop order at $12 a share and the most he can lose is $2 a share.

Other conditional orders include stop-and-reverse orders. When the stock hits a predetermined price, the position is closed and an opposite position is opened.

A stop-limit order calls for the buying or selling of a certain security once a predetermined price has been reached.

"Most clients know the orders exist but they don't understand the mechanics of it," says David Allan.

The TD Waterhouse Discount Brokerage senior manager is careful to point out that discount brokerages are not mandated to advise clients on their investment decisions, but TD Waterhouse, like all major brokerages, provide education relating to conditional orders on their websites.

There are many different kinds of conditional orders for many purposes, and each discount brokerage provides variations on the basics - along with a few interesting twists.

TD Waterhouse, for example, offers what are called "trailing stop orders" allowing the price of the stop to move up with the stock and hold steady when it falls.

A "bracket order" is essentially two orders. A stop-loss is placed below the price and a sell order is placed above, allowing profit protection if the stock goes up and a limited loss if it goes down.

Investments in increments

TD Waterhouse also offers dollar-cost-averaging plans, which allow clients to make an investment in increments to avoid entering the market on a high.

"This is something that could be suggested if the client asks," says Mr. Allan.

Many discount brokerages provide automatic alerts to a client's personal e-mail address or cellphone when orders are activated or significant movements take place among the investor's holdings.

BMO InvestorLine, for example, recently introduced its MyLink service. Clients can be alerted when orders expire, bonds mature or analyst ratings change on their stock holdings.

"The idea is to put the information in front of the client when they need it," says BMO InvestorLine president and chief executive officer Connie Stefankiewicz.

"Clients can have some comfort in knowing they are protected on the upside and the downside."

There are risks, however, that come with placing conditional orders. In most cases, the orders expire after 30 days and if you don't keep tabs, your investment or profits may not be protected.

Investors are also cautioned not to set their conditional-order positions too close to the purchase price. A volatile market could trigger trades too quickly and rack up massive trading fees.

Stop-loss orders inexact

Finally, conditional orders are not always precise. If a stock is in a freefall, the trigger will be pulled, but there is no certainty where the bullet will hit.

In other words, in the case of a stop-loss order, the actual settlement price could fall below the order price.

That's why it's important for investors to place conditional orders only on liquid stocks. These are stocks that trade on plenty of volume, and more buyers and sellers means investors have a better chance of getting the price they want, rather than having to wait for the next trade on low-volume stocks.

Dale Jackson is a producer at Business News Network.