Limit Order

From MarketsWiki
Jump to: navigation, search
FTSE Russell banner 2016.gif

A limit order is an order to buy or sell a security, futures contract or similar instrument at a specific price.[1] When placing a limit order, the customer specifies a minimum sale price or maximum purchase price, as contrasted with a market order, which implies that the order should be filled as soon as possible at the market price.[2]

Other limit order types include Stop-Limit orders, Stop-with-Limit orders, Reserve Orders or Limit-on-Close orders. Once the stop price is reached, the Stop-Limit order or Stop-with-Limit order becomes a limit order to buy or to sell at a specified price.[3]

Eurex

On Eurex, there are two types of limit orders; restricted and unrestricted. Unrestricted limit orders include Good-for-Day (also known as a day order), Good-till-Cancelled orders (also known as GTC or open orders]], and Good-till-Date (GTD) order. A GTD order is similar to a GTC order, but carries a specified date up to a year away from entry when the order is automatically cancelled.[4]

Restricted limit orders include Immediate-or-Cancelled (IOC), which is a limit order that is to be filled completely or to the extent possible and the portion that is not filled immediately is cancelled.[5] This order type is also refered to as Fill-or-Kill in other markets.

NYSE Arca Options

Types of limit orders on NYSE Arca Options include Limit, Reserve Order Reserve, Stop Limit, Post No Preference, Immediate-or-Cancelled, Fill-or-Kill and All or None.

  • Marketable Limit orders that cannot be filled in their entirety at the National Best Bid & Offer [[NBBO} on NYSE Arca will be routed to other exchanges. Any unfilled portion of the order will not be routed to the next best price level until all quotes at the current best bid or offer are exhausted. If the order is no longer marketable it will be ranked in the NYSE Arca Book.
  • A [[Reserve} order is a limit order with a portion of the size displayed and with a reserve portion of the size that is not displayed on NYSE Arca.
  • A Stop Limit Order becomes an active limit Order when the stop price is reached. A Stop Limit Order to buy is triggered when the option is bid or trades on NYSE Arca (or any exchange) at or above the specific stop price. A Stop Limit Order to sell becomes a Limit Order when the option is offered or trades on NYSE Arca (or any exchange) at or below the specified stop price. Order execution is fully automated. If the active limit order is not marketable it will post in the NYSE Arca Book.
  • Post No Preference (PNP) is a limit order that is to be executed in whole or in part on NYSE Arca. Any portion not executed is posted in the NYSE Arca Book without routing any portion of the order to another exchange. PNP Orders that would lock or cross the NBBO will be cancelled.
  • An Immediate-or-Cancel is a limit order immediately executed, in whole or part on NYSE Arca, with the unexecuted amount cancelled. IOC orders are not routed to other exchanges.
  • A Fill-or-Kill Order (FOK) is a market or limit order that is to be executed in its entirety on NYSE Arca as soon as the order is received, and if not so executed is to be cancelled. FOK orders will not route to other exchanges.
  • An All-or-None (AON) is a limit order that is to be executed in its entirety or not at all. Non-marketable AON orders will rest in the working book but not be displayed. AON orders will not route to other exchanges.


Resourcers

References

  1. Limit Order. U.S. Securities Exchange Commission.
  2. A Guide to the Language of the Futures Industry. U.S. Commodity Futures Trading Commission.
  3. Stop Limit. U.S. Securities Exchange Commission.
  4. Limit Orders. Eurex.
  5. Limit Orders. Eurex.