What is an order not held?
A non-held order, usually a market or limit order, gives the broker or the stock broker time and price to get the best possible price.
Understanding unsuspended orders
An investor who places an unmanaged order hopes that the floor trader can get a better market price than he can get by entering the market on his own. Although the trader on the ground has a discretion of price and time, he is not responsible for the losses that the shareholder could suffer with this type of order.
Non-held orders are the most common when trading international stocks. The opposite of a non-held order is a held order, which is one that most investors know best and which requires immediate execution.
Key points to remember
- A non-held order, usually a market or limit order, gives the broker or the stock broker time and price to get the best possible price.
- Two types of orders not held are Market not held and Limit not held.
- Orders not held exempt the broker from any loss that the shareholder may suffer.
Types of unsuspended orders
- Market order not held: This is a market order that the investor does not want to execute immediately. For example, an investor could give the broker an order not held in the market to buy 1000 Apple (AAPL) with an instruction to execute the order at the best possible price before the market closes.
- Limit order not maintained: an upper or lower limit is attached to this type of non-held order, but the broker is free to execute it even if the market is trading at the limit price. For example, a broker may receive a non-held limit order to purchase 1,000 AAPLs with an upper limit price of $ 200. This means that the investor would ideally like to buy AAPL at $ 200, but would rather not pay more than that for the stock. The broker, however, has the power to use his judgment to know if he is filling it up to $ 200, especially if he believes he can get a better price for the investor. The broker is not liable if the order is not executed or if it is executed at a price other than that indicated by the investor.
Advantages of orders not kept
Ground traders have the advantage of seeing order flows and trading patterns, which often gives them an edge when determining the best price and the best time to execute a client’s order. For example, a trader may notice a recurring increase in volume on the buy side of the order book which suggests that the price of a stock will likely continue to rise. This would lead the trader to execute an unsuccessful order from a client as soon as possible. They can also have other customer orders that they can place simultaneously.
Limitations of orders not kept
Once the investor has given an un held order to the trader, he fully trusts that person to execute the transaction at the best possible price. The investor cannot contest the execution of the transaction, provided that the broker has satisfied all the regulatory requirements. For example, if a shareholder believes that the broker should not have executed his non-held order before an FOMC interest rate announcement, he cannot request a new reservation.