Definition
The term held order refers to broker instructions to quickly execute a transaction on behalf of a trader. Held orders are market orders, which means the investor is willing to pay the bid price when buying securities or received the take price when selling them.
Explanation
While a Non-Held order allows a broker to use their judgement as to the timing, as well as the price paid or received on a security, a held order eliminates this flexibility. A held order is a market order that requires the broker to trade at the bid price for buy orders and the take price for sell orders.
The trader is instructing the broker to execute the transaction without hesitation. This type of instruction is typically used when an investor would like to change their exposure to a specific stock or security. For this reason, the investor is less concerned over the price of the transaction than the timing of it.
Related Terms
The term Do Not Reduce refers to broker instructions to not lower the price of an order by the amount of an ordinary cash dividend on the ex-dividend date. Do Not Reduce orders typically apply when the price on an order is under market, and accompanied by Good-Til-Canceled instructions.
Moneyzine EditorJanuary 16th, 2024- The term Not-Held refers to broker instructions that permit discretion in order to obtain the best possible price on a security. Not-Held orders are typically associated with market or limit orders.Moneyzine EditorSeptember 20th, 2023
- The term order book is used to describe a listing of buyers and sellers interested in exchanging certain securities. Oftentimes an electronic matching engine is used to determine which transactions can be successfully executed.Moneyzine EditorSeptember 20th, 2023
- The term Small-Order Execution System refers to a technology that automatically executes trades on the NASDAQ securities market. The Small-Order Execution System was implemented after the stock market crash of 1987.Moneyzine EditorSeptember 21st, 2023
- The term order imbalance refers to a situation where there are surplus buy or sell orders for an equity security. Order imbalances can occur when a company makes an announcement that will materially affect the price of their stock.Moneyzine EditorSeptember 20th, 2023
- The term switch order refers to broker instructions to sell one security and buy another if a specified price differential exists. A switch order allows a trader to use the proceeds from a sale to fund the purchase of securities.Moneyzine EditorSeptember 21st, 2023
- The term on-floor refers to an order that is placed by a member of an exchange to trade securities in their account. On-floor orders typically refer to the trading of equities.Moneyzine EditorSeptember 20th, 2023
The term fractional discretion order refers to broker instructions that allow modification of a buy or sell price within a fraction of a point. Traders will place fractional discretion orders to guarantee execution.Moneyzine EditorJanuary 18th, 2024
