Orders Glossary

agency order: An order to buy or sell that does not originate from the actual customer for whose account it is executed.

all or any part: A stipulation of a buy or sell order for a discretionary account which instructs the broker to fill whatever part of the order he/she feels is appropriate, at the specified price.

all or none: (AON) A stipulation of a buy or sell order which instructs the broker to either fill the whole order or don't fill it at all; but in the latter case, don't cancel it, as the broker would if the order were fill or kill. For example, the customer won't accept a partial execution (only 300 shares out of an order for 1000).

alternative order: Two orders given to a broker, for which the execution of either one automatically cancels the other. One example is combining a buy limit order with buy stop order. The buy limit order will only be executed if the market price is below a specified price, and the buy stop order will only be executed if the market price is above a certain price. If one order is executed, the other is cancelled. also called either-or order.

at-the-opening order: An order that specifies it is to be executed at the opening of the market or of trading in that security or else it is to be canceled. The order does not have to be executed at the opening price.

block trade: Usually, a trade of 10,000 shares or more. For bonds, a $200,000 face amount or more. Block trades are often executed through a special section of a brokerage firm called the Block Desk. Using the Block Desk may result in a better price.

buy stop order: An order to buy a security that is entered at a price above the current offering price and that is triggered when the market price touches or goes through the buy stop price.

buy stop limit order: A buy stop limit means that as soon as a trade occurs at the target price, the order becomes a limit order to buy.

canceled order: A buy or sell order that is canceled before it has been executed. In most cases, a Limit Order can be canceled at any time as long as it has not been executed. A Market Order may only be canceled if the order is placed after market hours and is then canceled before the market opens the following day. If part of the order has already been executed, a cancel instruction stops work on the remainder of the order.

conditional order: An order with stipulations added, such as price or quantity.

contingency order: An order that is executed only if one or more specified conditions are met. Possible conditions may include the price of another security or the completion of another order. Brokerages do not have to accept contingency orders, but some do.

day order: A day order is good just as the name implies: for the day only. At the end of the day if the order is not filled, it is automatically canceled. All orders are day orders unless otherwise indicated. A day order is good for the day of entry only. Compare "good-til-cancelled" order, which means that the order remains in effect until executed or cancelled.

discretionary trading: Customer accounts where specified employees of a brokerage firm may execute trades without explicit authorization of every individual transaction.

do not reduce: (DNR) Stipulation to an order that instructs the broker not to decrease the limit price on buy-limit and sell-stop orders on the record date or ex-dividend date of a cash dividend.

duration of an order: In brokerages, when trading stocks or options, it designates whether a limit trade is valid for good until canceled or day only. Market orders all have a duration of day only by definition, since they are executed as soon as possible at the market price. It is possible that a market order could arrive after the market close, in which case, it may remain valid at the next market opening.

either-or order: An order that involves entry of a limit order and a stop order on the same ticket for the same security at different prices--also called an "alternative order." The order is either to buy or to sell, never both. In an either/or buy limit/buy stop order, for example, the buy limit is below the current price and the buy stop is above. The execution of the buy limit cancels the buy stop and vice versa. To illustrate, if a stock is trading at 32, an investor may place an order to either buy at 30 or 33 stop. If the price rises to 33 (or above), the stop is chosen--the security is purchased at the market and the limit is canceled. If the price falls to 30, the limit is executed and the stop is canceled. If there is a partial execution of one, the number of shares executed is automatically canceled from the other. An either/or order is used by an investor who is uneasy about a stock's price movement and wants to protect an interest or position if the price fluctuates in an unexpected manner. See alternative order.

executed order: A completed buy or sell transaction.

fill-or-kill order: (FOK) An order that must be offered or bid immediately at a given price and canceled if not executed if it cannot be filled immediately at its stipulated price limit. Also known as an Immediate Order.

frontrunning: Frontrunning occurs when the broker uses his knowledge of an impending block or program trade to trade advantageously on his own account.

gather in the stops: A trading strategy in which investors sell stocks in order to drive prices below a level at which stop orders are known to have been set by others. This triggers more selling, which in turn sets off more stop orders, accelerating the decline. In order to mitigate the effects of such a feedback loop, exchange officials sometimes suspend stop orders. [InvestorWords.com]

good-til-canceled order: (GTC) An order to buy or sell at a fixed price that remains open until executed or canceled by the customer. Most brokerage firms let GTC orders automatically expire after 30 - 90 days. Also called an Open Order.

good til executed order: (GTX) An order to buy or sell that remains in effect until it is executed.

good this week order: (GTW) - Order which is valid only for the week in which it is placed.

immediate or cancel order: (IOC) IOC orders will scan against the existing Island book and any portion of the order not immediately executed will be cancelled.

kill: Cancel a trade or order that has been placed but not filled.

limit order: An order to buy a security at or below a certain price; or sell at or above a certain price. It's a conditional trading order designed to avoid the danger of adverse unexpected price changes. The customer specifies a price and the order can be executed only if the market reaches or betters that price. If the price you specify is not within the current market quote, it is said to be 'away from the market' and will be entered into the queue behind any other orders. If no price is indicated, the order is a market order by default. There is no guarantee that a limit order will ever be filled. Sometimes known as an "or better" order.

limit order book: A record of unexecuted limit orders that is maintained by the specialist. These orders are treated equally with other orders in terms of priority of execution.

market order: (MKT) An order for a broker to buy or sell a security immediately at the best available price at the time the order is received in the trading marketplace. Most orders executed on the world exchanges are of this type. A market order will always be filled, and is the only order that guarantees execution. This type of order takes precedence over all other orders, such as limit orders. The catch is that it may not be filled at the price you expected or wanted. Also known as unrestricted order.

market-if-touched order: (MIT) A contingency order given with a limited price instruction, that when the market reaches the required price level, it becomes a market order to trade at the next best trading price. This order can be given as a buy or sell order. The significant difference between an MIT order and a Stop order is its location for execution relative to current prices.

market-not-held order: This is a market order. However, the investor is giving the floor trader the discretion to execute the order when he feels it is best. If the floor trade feels that the market will decline, he may hold the order to try to get a better fill. This order may not get filled.

market-on-close order: (MOC) A market order to be executed at the close of the trading session requesting an execution price as close as possible to the closing market price.See Stop-Close-Only Order.

market-on-open order: An order to buy or sell at the beginning of the trading session at a price within the opening range of prices. Execution can take place only during the exchange-specified opening period. The trading price does not need to be the first price traded nor necessarily be guaranteed to be the best price in that range.

one-cancels-the-other order: (OCO) An order designating both sides or the same side of a trading range with different months, markets, commodities, prices, etc. When the condition of one is reached and executed, the other is canceled.

open order: Same as GTC (good-til-cancelled) An open order stays active until it is executed or the investor cancels it.

or-better order: Same as a limit order.

price limit order: Same as limit order.The customer specifies the price at which a trade can be executed.

rejected order: Order which is invalid or unacceptable.

round turn: Futures and commodities brokers generally only charge one commission, called a round-turn commission, to open and close a position of the same delivery month. Refers to the complete process of first taking on a position and then the later liquidation of that position.This practice differs from stock trades, which involve one commission to buy a stock and another to sell it.

round trip: See round turn.

sell limit order: A limit order used when selling a position.

sell stop limit order: A sell stop limit order means that as soon as the stock hits a target price, the order becomes a limit order to sell.

skip-day settlement: The trade is settled one business day beyond what is normal.

stop order: An order to buy or sell a security at a designated price, called the stop price, after the security has traded at that price. A stop order becomes a market order when the stop price is hit and the order will be executed at any market price at, above or below stop price. Buy stop orders are placed above the present market price. Sell stop orders are placed below the present market price. A stop order can be a day order or a good-till-cancelled (GTC) order. A variation of this, the stop-limit order, will only be executed at the limit price. If the market falls quickly, a stop order might be executed at a price much lower than the stop price and a stop-limit order might not get executed at all. Some investors prefer to set Mental Stops. When a stop order is executed an investor is said to be "stopped out". Also called a stop-loss order when it's a sell order. This order is typically used in anticipation of or in protection against a market reversal. To the long position, the stop loss order is also known as a "stop sell" because he will sell to liquidate the position. Conversely, to the short position, the stop loss order is also known as a "stop buy" because he will buy to liquidate the position. Note: If a stop order is placed at a price that would trigger an immediate execution, then the specialist or the market maker rejects the order as invalid, and no order exists. Sometimes referred to as a Stop Loss Order.

stop-limit order: An order placed with a broker to buy or sell at a specified price or better (called the stop-limit price) after a given stop price has been reached or passed. In contrast to the stop order, which becomes a market order once the stop is reached, the stop-limit order becomes a limit order once the stop is reached. If the order cannot be executed, it is held until the stated price or better is reached again. Usually the stop price and the limit price are the same; but, occasionally the limit price will be different from the stop price to provide some margin of flexibility to the broker while protecting the investor who placed the order from the adverse effects of a major price move beyond the limit.

stop loss order: A sell stop order placed below the current trading price to protect unrealized profits or limit losses on holdings should the price begin to decline. A "trailing stop" is a stop price that is moved up periodically as the security price moves up.

stop-close-only order: A stop order which can only be executed, if possible, during the closing period of the market. See also Market-on-Close Order.

stopped out: When a stop order is executed an investor is said to be "stopped out" of a position.

time-in-force: The length of time that a customer's order is to remain working.

time limit order: A customer order that designates the time during which it can be executed, such as day or GTC (Good-Til-Canceled).

time-stamped: Part of the order-routing process in which the time of day is stamped on an order. An order is time-stamped when it is (1) received on the trading floor, and (2) completed.

trailing stop order: A stop order that follows the movement of a stock's price. Trailing stops for long positions move up as the stock's price moves up. In short positions, they follow the stock's price down.

trailing stop order: A stop price to buy or sell that is moved up periodically as the security price moves up or down, following the prevailing price trend. For example, an investor may purchase a futures contract for December Gold for $325 and simultaneously place a stop order to sell the contract if it drops to $318 or below. If the commodity contract price rises to $330 without going through the $318 stop price, the investor raises the stop price to $325. Thus the stop price trails the market price of the contract.

unrestricted order: Same as a market order.