Order Types

Market Order | Limit Order | Stop Order | Stop Limit Order | Stop Close Order | Market If Touched Order | Good Until Canceled Order | One Cancels the Other Order | Market on Close Order | Market on Open Order | Enter and Cancel Order | Spread Order | Or Better Order | Fill or Kill Order


Note: The same order may have different meanings depending on whether the order is to be executed in pit trading or through an electronic exchange.


Market Order


The market order is the most frequently used order. It is a good order to use once you have made a decision about opening or closing a position. It can keep the customer from having to chase a market trying to get in or out of a position. The market order is executed at the best possible price obtainable at the time the order reaches the trading pit.


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Limit Order


The limit order is an order to buy or sell at a designated price. Limit Orders to buy are placed below the market while limit orders to sell are placed above the market. Since the market may never get high enough or low enough to trigger a limit order, a customer may miss the market if he uses a limit order. (Even though you may see the market touch a limit price several times, this does not guarantee or earn the customer a fill at that price.)



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Stop Order


Stop orders can be used for three purposes:



A buy stop order is placed above the market and a sell stop order is placed below the market. Once the stop price is touched, the order is treated like a market order and will be filled at the best possible price.



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Stop Limit Order


A stop limit order lists two prices and is an attempt to gain more control over the price at which your stop is filled. The first part of the order is written like the above stop order. The second part of the order specifies a limit price. This indicates that once your stop is triggered, you do not wish to be filled beyond the limit price. Stop limit orders should usually not be used when trying to exit a position. If a customer does not give a limit price, then the stop price and the limit price are meant to be identical.


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Stop Close Order (SCO)


The stop price on a stop close only will only be triggered if the market touches the stop during the close of trading. The disadvantage of this order is a fast market in the last few minutes of trading may cause the order to be filled at an undesirable price. It can, however, protect the customer from getting filled during adverse price fluctuations during the course of the day.


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Market If Touched Order (MIT)


MITs are the opposite of stop orders. Buy MITs are placed below the market and Sell MITs are placed above the market. An MIT order is usually used to enter the market or initiate a trade. An MIT order is similar to a limit order in that a specific price is placed on the order. However, an MIT order becomes a market order once the limit price is touched or passed through. An execution may be at, above, or below the originally specified price. An MIT order will not be executed if the market fails to touch the MIT specified price.


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Good Until Canceled Order (GTC)


Good Till Canceled (or Open Order). Used in conjunction with a Limit or Stop order. Order will remain valid and worked until client cancels order, or it is filled, or contract expires.


GTC Order Does Not Cancel Automatically!



If an order is not designated Good Till Canceled, it is a Day Order and will expire at the end of the current trading session unless filled or canceled prior to the close.


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One Cancels the Other Order (OCO)


One (order) Cancels (the) Other.



When one order is executed, the other is automatically canceled.


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Market on Close (MOC)


This is an order that will be filled during the final seconds of trading at whatever price is available. PLEASE NOTE: A FLOOR BROKER RESERVES THE RIGHT TO REFUSE AN MOC ORDER UP TO FIFTEEN MINUTES BEFORE THE CLOSE DEPENDING UPON MARKET CONDITIONS.


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Market on Opening (MOO)


This is an order that the customer wishes to be executed during the opening range of trading at the best possible price obtainable within the opening range. Not all exchanges recognize this type of order. One such exchange is the Chicago Board of Trade.


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Enter and Cancel Order


All orders, except Market Orders, can be canceled and replaced with a different order unless filled prior to cancellation.



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Spread Order


The customer wishes to take a simultaneous long and short position in an attempt to profit via the price differential or "spread" between two prices. A spread can be established between different months of the same commodity, between related commodities or between the same or related commodities traded on two different exchanges. A spread order can be entered at the market or you can designate that you wish to be filled when the price difference between the commodities reaches a certain point (or premium). For example: BUY 1 JUNE LIVE CATTLE, SELL 1 AUGUST LIVE CATTLE PLUS 100 TO THE AUGUST SELL SIDE. This means that the customer wants to initiate or liquidate the spread when August Cattle is 100 points higher than June cattle.


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Or Better Order


The pit broker is obligated to get the best possible price for the customer. Putting an OB on an order does not cause him to work harder. If the price is NOT OB, the broker is irritated because he is paying special attention to a ticket that does not deserve it. Think of OB as MARKET with a LIMIT. If the price does not have an OB next to it, and the market is considerably better, the pit broker may question the runner to see if the order should have been a stop. They will return the order for clarification which could delay the filling of the order and possibly change the results of the fill. ONLY USE "OR BETTER" IF THE MARKET IS "OR BETTER."


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Fill or Kill Order (FOK)


The fill or kill order is used by customers wishing an immediate fill, but at a specified price. The floor broker will bid or offer the order three times and immediately return either a fill or an unable.



If you are not sure how to enter an order, ask your broker! Not all exchanges accept all types of orders.