Financial Terms related to Order

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ORDER
At the opening order

• An order that 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.

Buy limit order

• A conditional trading order that indicates a security may be purchased only at the
designated price or lower. Related: Sell limit order.

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.

Complex order
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• Is an order which has multiple requirements. It can contain contingencies, stops,

stop limits, time instructions and other elements.

Conditional order

• See Contingent Order.

Contingent order

• Is an order with at least one contingency attached. Contingencies can be specific

times or events.

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Cross border risk

• Refers to the volatility of returns on international investments caused by events

associated with a particular country as opposed to events associated solely with a
particular economic or financial agent.

Day order

• An order to buy or sell a security that automatically expires if not executed on the
day the order is placed.

• An order to buy or sell stock that automatically expires if it can't be executed on the
day it is entered.

• Is an order to trade securities, derivatives or futures which expires at the end of the
trading day for which it was entered.

Designated order turnaround

• Is the New York Stock Exchange's computerized order entry system. It is also
known as DOT.

Economic order quantity

• Abbreviated EOQ. The order quantity that minimizes total inventory costs.

• An inventory management technique for determining an item's optimal order

quantity, which is the size that minimizes the total of its order costs and carrying
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costs.

Fill or kill order

• A trading order that is canceled unless executed within a designated time period.
Related: open order.

Limit order

• An order to buy a stock at or below a specified price or to sell a stock at or above a

specified price. For instance, you could tell a broker Buy me 100 shares of XYZ Corp

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at $8 or less or to sell 100 shares of XYZ at $10 or better. The customer specifies a
price and the order can be executed only if the market reaches or betters that price.
A conditional trading order designed to avoid the danger of adverse unexpected
price changes.

• An order placed with a broker to buy or sell at a price as good or better than the
specified limit price. 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

• This is an order to immediately buy or sell a security at the current trading price.

• Also known as an Unrestricted Order. An order to buy or sell a stock immediately at

the best available current price. A market order is the only order that guarantees
execution.

Matching orders

• Simultaneously entering identical (or nearly identical) buy and sell orders for a
security to create the appearance of active trading in that security. This violates the
antifraud provisions of the Securities Exchange Act of 1934.
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Negotiable order of withdrawal

• Abbreviated NOW. Demand deposits that pay interest.

Open good til cancelled order

• An individual investor can place an order to buy or sell a security. That open order
stays active until it is completed or the investor cancels it.

Open order

• Is an order that is or remains live or in effect until it is filled or canceled.

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• An order to buy or sell a security that remains in effect until it is either canceled by
the customer or executed.

Or better order

• See Limit Order.

Order

• Is a set of instructions with the intent of executing a transaction. The following is a

list of order types. See: All or None (AON) or All or Nothing, Buy on Close, Buy on
Opening, Contingent, Discretionary, Non-Discretionary, Do Not Reduce (DNR) ,
Exchange for Physicals (EFP) , Fill or Kill (FOK) , Good Till Canceled (GTC) ,
Immediate or Cancel (IOC) , Limit (LMT) , Market, Market if Touched (MIT), Market
on Close (MOC) , Market on Opening, Not Held, One Cancels the Other (OCO),
Open Order, Sell on Close, Sell on Opening, Stop (STP), Stop Limit (STP LMT), and
various combinations as with spreads, options, and other instruments.

Order book official

• Is the book of public orders held for execution by the Chicago Board Options
Exchange (CBOE).

Order costs

• The fixed costs of placing, receiving and handling an inventory order.

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Order support system

• Is the Chicago Board Options Exchange's (CBOE) automated order system.

Orderly

• Refers to trading or markets which behave in a smooth, rational manner.

Pecking order

• A hierarchy of financing beginning with retained earnings followed by debt

financing and finally external equity financing.

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Pecking order view of capital structure

• The argument that external financing transaction costs, especially those associated
with the problem of adverse selection, create a dynamic environment in which firms
have a preference, or pecking-order of preferred sources of financing, when all else
is equal. Internally generated funds are the most preferred, new debt is next, debt-
equity hybrids are next, and new equity is the least preferred source.

Pre sale order

• Refers to an order placed with a syndicate prior to the winning of the municipal
issue by that syndicate. Often this order receives execution priority.

Principal orders

• Refers to activity by a broker/dealer when buying or selling for his or her own
account and risk.

Reorder point

• The point at which to reorder inventory, expressed as days of lead time ? daily
usage.

Resting order

• Is an order waiting to be executed. Often it refers to a limit or other conditional

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order.

Sell limit order

• Conditional trading order that indicates that a, security may be sold at the
designated price or higher. Related: buy limit order.

Stop limit order

• An order placed with a broker to buy or sell at a specified price or better after a
given stop price has been reached or passed.

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• A stop order that designates a price limit. 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.

Stop loss order

• An order placed with a broker to buy or sell when a certain price is reached;
designed to limit an investor's loss on a security position.

• An order to sell a stock when the price falls to a specified level.

Stop order

• An order to sell a stock when its price falls to a particular point to limit an investor's
losses. See also: Stop-Loss; Stop-Limit Order.

• An order to buy or sell at the market when a definite price is reached, either above
(on a buy) or below (on a sell) the price that prevailed when the order was given.

Unrestricted order

• See Market Order.