Securities Markets - Order Qualifiers

 

Day Orders

: It is assumed that every order is a day order, which means the order is cancelled at the end of the trading day if it has not been executed.

Good Till Cancelled (GTC) Orders: This type of order remains in place until it is executed or cancelled by the customer.

Market on  Open  this is an order that is entered to be executed at the opening of the trading session on the opening print. This order can be entered as a market order of as a limit order.

Market on Close Orders: This type of order can be entered at any time of the day up unilt the last few minutes of trading and may be entered as a market order or as a limit to be executed at the close of the market on the closing print.

Not Held (NH) Orders: In an NH order, the floor broker has discretion on price and timing of trade execution.

Fill or Kill (FOK) Orders: The order is either executed immediately in full or killed.

Immediate or Cancel Orders: The order is executed immediately in full or in part, and any part of the order that remains unfilled is cancelled.

All-or-None Orders: The order is executed in full, but not necessarily immediately.

Exam Tips and Tricks
Make sure you are fully aware of at least day orders and GTC orders!

Quotations
 

  • Firm Quotes: All quotes are firm quotes unless otherwise indicated. A firm quote is the price at which a broker-dealer or market maker will buy or sell at least one trading unit of stocks (100 shares) or bonds (five bonds) at the quoted price. For instance, a firm market for a stock sounds like, "The market is 54-55", or "It is 14-14 .20". If the market maker refuses to do business at the firmly quoted price after the fact, his or her action is called backing away. Backing away is against FINRA trading rules.
     
  • Subject Quotes: A subject quote is given when the price is tentative, subject to the market maker's reconfirmation. The market maker may state, "It's 20 to 22, work out", or "The price is around 78-78 ¾".
     
  • Qualified Quotes: Contrary to firm quotes, qualified quotes are for informational purposes only and do not obligate the broker dealer to trade at those prices . Two types of qualified quotes are recognized: workout quotes and nominal quotes.

Workout quotes are approximate quotes made either when the market maker has a trade for which the order size is too large for the market or when trading in the security is light and the order needs to be "finessed" without disrupting the market. Workout quotes are common in institutional block trades, characterized by trading in units of 10,000 or more shares of a security. Nominal quotes are used to give a customer a sense of the market for a security under active trading but are not based on a real-time, factual quote for the security in question.

Exam Tips and Tricks
It is definitely a benefit to know the difference between firm
quotes and subject quotes.

 

Introduction
Related Articles
  1. Term

    Understanding the Maintenance Margin

    A maintenance margin is the minimum amount of equity that must be kept in a margin account.
  2. Investing Basics

    Brokers and RIAs: One and the Same?

    Brokers and registered investment advisors have some key differences. Here's what you need to know.
  3. Professionals

    Is a Google Robo-Advisor on the Horizon?

    It's possible that Google is looking to get into the robo-advisor business, either as a new venture or as a way to provide more benefits to employees.
  4. Professionals

    Understanding Series 6

    Upon successful completion of the Series 6, an individual will have the qualifications needed to sell open end mutual funds and variable annuities
  5. Professionals

    Top Strategies on How to Become a Stock Broker

    Gunning to be a stock broker and want an edge? Here's some veteran advice.
  6. Trading Systems & Software

    Steps to Starting Up an Independent Broker Dealer

    Launching your own broker-dealer is a lot of work, but the potential payoff is great, both personally and financially.
  7. Professionals

    Understanding Series 63

    Series 63 is a securities license that entitles the holder to sell securities in a particular state.
  8. Professionals

    How To Answer Option Questions On The Series 7 Exam

    Learn how to answer option questions on the Series 7 exam. Pass your Series 7 exam with the help of these tips.
  9. Investing Basics

    Online Portfolio Management, DIY or Fee-Based Financial Advisor: Which Is Right For You?

    Should you use an online financial planning service, or do professional, fee-based financial planners justify their higher costs?
  10. Insurance

    Municipal Bond Tips For The Series 7 Exam

    Learn to distinguish between general obligation and revenue bonds to ace this test.
RELATED TERMS
  1. Series 6

    A securities license entitling the holder to register as a limited ...
  2. Comprehensive Automated Risk Data ...

    The Comprehensive Automated Risk Data System (CARDS) is an initiative ...
  3. Corporate Financing Committee

    A regulatory group that reviews documentation that is submitted ...
  4. Series 79

    A examination to ensure a candidate is qualified to become a ...
  5. Research Analyst

    A person who prepares investigative reports on equity securities. ...
  6. Series 34

    An exam required for individuals seeking to engage in off-exchange ...
RELATED FAQS
  1. How does a broker decide which customers are eligible to open a margin account?

    Brokers have the sole discretion to determine which customers may open margin accounts with them, although there are regulations ... Read Full Answer >>
  2. What are some of the major regulatory agencies responsible for overseeing financial ...

    There are a number of agencies assigned to regulate and oversee financial institutions and financial markets, including the ... Read Full Answer >>
  3. Why is the Nasdaq more heavily weighted to tech stocks than other stock exchanges?

    The Nasdaq became the world's first electronic stock exchange at its inception in 1971. The exchange's dedication to advancing ... Read Full Answer >>
  4. How are margin calls regulated by the SEC?

    The Federal Reserve Board and the Financial Industry Regulatory Authority (FINRA), not the Securities and Exchange Commission ... Read Full Answer >>
  5. If I have only a limited amount of time to study for the Series 6, what should I ...

    The Series 6 Investment Company and Variable Contracts Products Representative Qualification Examination is administered ... Read Full Answer >>
  6. How does an underwriter syndicate work together on an initial public offering (IPO)?

    An underwriting syndicate is a group of investment banks that share the responsibility of marketing the shares of a company ... Read Full Answer >>
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!