231:(Reg NMS), which applies to U.S. stock exchanges, supports two types of IOC orders, one of which is Reg NMS compliant and will not be routed during an exchange sweep, and one that can be routed to other exchanges. Optimal order routing is a difficult problem that cannot be addressed with the usual perfect market paradigm. Liquidity needs to be modeled in a realistic way if we are to understand such issues as optimal order routing and placement. The Order Protection (or Trade Through) Rule (Rule 611) was designed to improve intermarket price priority for quotations that are immediately and automatically accessible, but its role in predatory trading behavior has faced mounting controversy in the recent years.
259:. When the stop price is reached, a stop order becomes a market order. A buy-stop order is entered at a stop price above the current market price. Investors generally use a buy-stop order to limit a loss or to protect a profit on a stock that they have sold short. A sell-stop order is entered at a stop price below the current market price. Investors generally use a sell-stop order to limit a loss or to protect a profit on a stock that they own.
482:
of two parts: A limit buy order for ABC at $ 10.00, and a limit sell order for the same stock at $ 10.05. If ABC reaches $ 10.00, ABC's limit order would be executed, and the sell limit order would be sent. In short, multiple orders are attached to a main order, and the orders are executed sequentially.
128:. For example, if a stock is asked for $ 86.41 (large size), a buy order with a limit of $ 90 can be filled right away. Similarly, if a stock is bid $ 86.40, a sell order with a limit of $ 80 will be filled right away. A limit order may be partially filled from the book and the rest added to the book.
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All of the above order types are usually available in modern electronic markets, but order priority rules encourage simple market and limit orders. Market orders receive highest priority, followed by limit orders. If a limit order has priority, it is the next trade executed at the limit price. Simple
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One sends other (OSO) orders are used when the trader wishes to send a new order only when another one has been executed. For instance, the trader may wish to buy stock ABC at $ 10.00 then immediately try to sell it at $ 10.05 to gain the spread. In this case, they would execute an OSO order composed
472:
One cancels other (OCO) orders are used when the trader wishes to capitalize on only one of two or more possible trading possibilities. For instance, the trader may wish to trade stock ABC at $ 10.00 or XYZ at $ 20.00. In this case, they would execute an OCO order composed of two parts: A limit order
262:
When the stop price is reached, the stop order becomes a market order. This means the trade will definitely be executed, but not necessarily at or near the stop price, particularly when the order is placed into a fast-moving market, or if there is insufficient liquidity available relative to the size
84:
A market order is the simplest of the order types. This order type does not allow any control over the price received. The order is filled at the best price available at the relevant time. In fast-moving markets, the price paid or received may be quite different from the last price quoted before the
291:
is always below the current market price. For example, if an investor holds a stock currently valued at $ 50 and is worried that the value may drop, they can place a sell-stop order at $ 40. If the share price drops to $ 40, the broker sells the stock at the next available price. This can limit the
113:
can only be executed at the limit price or lower. For example, if an investor wants to buy a stock, but does not want to pay more than $ 30 for it, the investor can place a limit order to buy the stock at $ 30. By entering a limit order rather than a market order, the investor will not buy the stock
206:, then it is entered in an auction but has no effect otherwise. There is often some deadline, for example, orders must be in 20 minutes before the auction. They are single-price because all orders, if they transact at all, transact at the same price, the open price and the close price respectively.
105:
at no more than a specific price, or to sell a security at no less than a specific price (called "or better" for either direction). This gives the trader (customer) control over the price at which the trade is executed; however, the order may never be executed ("filled"). Limit orders are used when
332:
is an order to buy or sell a stock that combines the features of a stop order and a limit order. Once the stop price is reached, a stop-limit order becomes a limit order that will be executed at a specified price (or better). As with all limit orders, a stop-limit order does not get filled if the
354:
trailing stop order is not executed because ABC has not fallen $ 1.00 from $ 10.00. Later, the stock rises to a high of $ 15.00 which resets the stop price to $ 13.50. It then falls to $ 13.50 ($ 1.50 (10%) from its high of $ 15.00) and the trailing stop sell order is entered as a market order.
353:
For example, a trader has bought stock ABC at $ 10.00 and immediately places a trailing stop sell order to sell ABC with a $ 1.00 trailing stop (10% of its current price). This sets the stop price to $ 9.00. After placing the order, ABC does not exceed $ 10.00 and falls to a low of $ 9.01. The
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activation price, hence the name. This parameter is entered as a percentage change or actual specific amount of rise (or fall) in the security price. Trailing stop sell orders are used to maximize and protect profit as a stock's price rises and limit losses when its price falls.
320:) — the investor may use a buy-stop order to protect against losses if the price goes too high. It can also be used to advantage in a declining market when an investor decides to enter a long position at what he perceives to be prices close to the bottom after a market sell-off.
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A market order may be split across multiple participants on the other side of the transaction, resulting in different prices for some of the shares. It is the most basic of all orders and therefore, they incur the lowest of commissions, from both online and traditional brokers.
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is an order that allows the broker to delay the execution at its discretion to try to get a better price; these are sometimes called not-held orders. It is commonly added to stop loss orders and limit orders. They can be placed via a broker or an electronic trading system.
225:(LOO). For example, a market-on-open order is guaranteed to get the open price, whatever that may be. A buy limit-on-open order is filled if the open price is lower, not filled if the open price is higher, and may or may not be filled if the open price is the same.
139:(AON). FOK orders are either filled completely on the first attempt or canceled outright, while AON orders stipulate that the order must be filled with the entire number of shares specified, or not filled at all. If it is not filled, it is still held on the
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A mid-price order is an order whose limit price is continually set at the average of the "best bid" and "best offer" prices in the market. The values of the bid and offer prices used in this calculation may be either a local or
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An uptick is when the last (non-zero) price change is positive, and a downtick is when the last (non-zero) price change is negative. Any tick-sensitive instruction can be entered at the trader's option, for example
198:
Most markets have single-price auctions at the beginning ("open") and the end ("close") of regular trading. Some markets may also have before-lunch and after-lunch orders. An order may be specified
464:
is an order to sell at the best available price, if the market price goes up to the "if touched" level. As soon as this trigger price is touched the order becomes a market sell order.
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is an order to buy at the best available price, if the market price goes down to the "if touched" level. As soon as this trigger price is touched the order becomes a market buy order.
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An "All-or-none" buy limit order is an order to buy at the specified price if another trader is offering to sell the full amount of the order, but otherwise not display the order.
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prices. As long as there are willing sellers and buyers, market orders are filled. Market orders are used when certainty of execution is a priority over the price of execution.
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limit orders generally get high priority, based on a first-come-first-served rule. Conditional orders generally get priority based on the time the condition is met.
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for ABC at $ 10.00 and a limit order for XYZ at $ 20.00. If ABC reaches $ 10.00, ABC's limit order would be executed, and the XYZ limit order would be canceled.
195:(FOK) orders are usually limit orders that must be executed or cancelled immediately. Unlike IOC orders, FOK orders require the full quantity to be executed.
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A trader can use a trailing stop order to lock the stop-loss amount and reduce the risk to your acceptable range without limiting your profitable potential.
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This article is about order in finance. For the order to engage in a commercial transaction for specific products or services as used in business, see
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159:(GFD) (the most common) is a market or limit order that is in force from the time the order is submitted to the end of the day's trading session. For
495:, although these orders are rare. In markets where short sales may only be executed on an uptick, a short–sell order is inherently tick-sensitive.
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179:(GTC) orders require a specific cancelling order, which can persist indefinitely (although brokers may set some limits, for example, 90 days).
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562:") order requires the broker to display only a small part of the order, leaving a large undisplayed quantity "below the surface".
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The use of stop orders is much more frequent for stocks and futures that trade on an exchange than those that trade in the
187:(IOC) orders are immediately executed or cancelled by the exchange. Unlike FOK orders, IOC orders allow for partial fills.
846:
Weiss, David (2006). "After the Trade is Made, Processing
Securities Transactions", Portfolio; a member of Penguin Group.
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is similar to a trailing stop order. Instead of selling at market price when triggered, the order becomes a limit order.
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A conditional order is any order other than a limit order which is executed only when a specific condition is satisfied.
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investor's losses or lock in some of the investor's profits (if the stop price is at or above the purchase price).
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Larry Harris, Trading & Exchanges, Oxford Press, Oxford, 2003. Chapter 4 "Orders and Order
Properties."
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Both buy and sell orders can be additionally constrained. Two of the most common additional constraints are
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Puts to the market a pair of two orders: For the same title, for the same direction, i.e., both to sell:
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is an order to buy or sell a stock once the price of the stock reaches a specified price, known as the
316:— hoping for the stock price to go down so they can return the borrowed shares at a lower price (i.e.
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794:, Volume 57, Issue 6, "Transparency and Market Microstructure", November–December 2005, pp. 576–593.
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at a higher price, but, may get fewer shares than he wants or not get the stock at all.
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A limit order that can be satisfied by orders in the limit book when it is received is
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is an instruction to sell at the best available price after the price goes below the
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Always jumps over the competitors order to be the best one, the first in the line
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To behave like a market maker, it is possible to use what are called peg orders.
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A broker may be instructed not to display the order to the market. For example:
136:
39:
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435:, where they enable market participants to trade whereby each pays half of the
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Price limitation, no more jumping over, unless the price moves back to its area
54:. These instructions can be simple or complicated, and can be sent to either a
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Vassilis
Polimenis, "A Realistic Model of Market Liquidity and Depth" (2005)
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is typically used to limit a loss (or to protect an existing profit) on a
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is always above the current market price. For example, if an investor
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the trader wishes to control price rather than certainty of execution.
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is analogous; it can only be executed at the limit price or higher.
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167:, this is until 5 p.m. EST/EDT for all currencies except the
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is an order type set to be executed at the very opening of the
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is entered with a stop parameter that creates a moving or
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security's price never reaches the specified limit price.
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is a buy or sell order to be executed immediately at the
62:. There are some standard instructions for such orders.
163:, the closing time is defined by the exchange. For the
580:(which are not displayed) are given lower priority.
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Mid-price peg order types are commonly supported on
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The second to lock the loss, not to get even deeper
16:Instructions to buy or sell financial securities
790:Vassilis Polimenis, "Slow and Fast Markets",
209:Combined with price instructions, this gives
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514:for the day, it would instead be cancelled.
833:U.S. Securities and Exchange Commission, "
820:U.S. Securities and Exchange Commission, "
657:U.S. Securities and Exchange Commission, "
901:U. S. Securities and Exchange Commission
894:U.S. Securities and Exchange Commission
424:. They are also called Peg-to-Midpoint.
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539:One sell order is to realize the profit
745:: CS1 maint: archived copy as title (
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30:is an instruction to buy or sell on a
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58:or directly to a trading venue via
856:Staff, Investopedia (2003-11-25).
633:Staff, Investopedia (2003-11-23).
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792:Journal of Economics and Business
547:Quantity and display instructions
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602:"Different Stock Sale Types"
462:sell market-if-touched order
455:buy market-if-touched order
429:alternative trading systems
422:national best bid and offer
393:Uses the other side of the
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367:trailing stop-limit order
361:Trailing stop-limit order
590:Central limit order book
468:One cancels other orders
671:New York Stock Exchange
443:Market-if-touched order
165:foreign exchange market
52:cryptocurrency exchange
808:"SEC.gov | Stop Order"
477:One sends other orders
934:Derivatives (finance)
858:"Discretionary Order"
781:, 25 (5), pp. 443-464
486:Tick-sensitive orders
143:for later execution.
101:is an order to buy a
403:The conditions are:
60:direct market access
905:accessed 4/21/2007.
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524:discretionary order
518:Discretionary order
343:trailing stop order
337:Trailing stop order
314:sells a stock short
184:Immediate or cancel
85:order was entered.
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567:Electronic markets
235:Conditional orders
176:Good-til-cancelled
169:New Zealand Dollar
157:good for day order
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659:Limit Order
243:Stop orders
221:(LOC), and
204:on the open
137:all or none
99:limit order
93:Limit order
40:bond market
913:Categories
867:2018-10-10
732:2017-09-07
644:2018-10-10
604:. Eroller.
596:References
433:dark pools
410:Step value
373:Peg orders
310:stop price
306:short sale
289:stop price
285:stop price
257:stop price
249:stop order
141:order book
135:(FOK) and
126:marketable
34:such as a
287:. A sell-
153:day order
763:Archived
741:cite web
584:See also
381:Peg best
347:trailing
318:covering
308:. A buy-
103:security
700:19 July
695:sec.gov
688:"Rules"
560:iceberg
531:Bracket
217:(MOO),
213:(MOC),
76:current
896:Orders
888:
395:spread
79:market
56:broker
726:(PDF)
719:(PDF)
691:(PDF)
512:trade
28:order
886:ISBN
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