DEFINITION of 'Batch Trading'

An accumulation of orders that are executed simultaneously. Batch trading saves time and effort by treating multiple buy and sell orders as one large transaction. At least in the United States, however, batch trading is only allowed at the market open and pertains solely to orders placed during non-market hours.

BREAKING DOWN 'Batch Trading'

Generally speaking, batch trades are confined to high-volume stocks that are not overly price-sensitive. Furthermore, to qualify as a batch trade, the security in question must be trading at the price specified in the order (if it was a limit/stop order). Batch trading is restricted to the market open in the U.S. so as to ensure that the stock's price is fair and just, i.e. not fluctuating wildly from one batch trade to the next.

RELATED TERMS
  1. Batch Processing

    Processing transactions in a group or batch. No user interaction ...
  2. Batch-Level Activities

    In managerial accounting, production costs that are incurred ...
  3. Batch Header Record

    A standard record of information regarding the transfer of a ...
  4. Walrasian Market

    An economic model of a market process in which orders are collected ...
  5. Acceptance Sampling

    A statistical measure used in quality control. A company cannot ...
  6. Batch Credit Card Processing

    The process of a merchant processing all of its authorized credit ...
Related Articles
  1. Investing

    Explaining Market Orders

    A market order is the most common order used to purchase a financial security.
  2. Trading

    The Basics Of Trading A Stock

    Taking control of your portfolio means knowing what orders to use when buying or selling stocks.
  3. Trading

    Understanding Order Execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
  4. Investing

    Making The Trade: Understand Order Types

    Buying and selling stock can be a lot like buying or selling a car. Traders should use and understand tools such as market orders, limit orders, day orders, and good-'til-canceled orders to ensure ...
  5. Trading

    How To Place Orders With A Forex Broker

    Learn how to set each type of stop and limit when trading currencies.
  6. Trading

    Which Order To Use? Stop-Loss Or Stop-Limit Orders

    Stop-loss and stop-limit orders can provide different types of protection for investors seeking to lock in profits or limit losses. Investors need to know how each type of order works to know ...
  7. Investing

    Is The Series 24 Exam Hard?

    What makes the series 24 so challenging? The exam focuses very heavily on the supervision of trading and market making and the supervision of investment banking.
  8. Investing

    Narrow Your Range With Stop-Limit Orders

    With stop-limit orders, buyers protect themselves from prices too high for their tastes.
  9. Investing

    Understanding Buy Stop Orders

    A buy stop order is an order to buy a stock at a specific price above its current market price.
RELATED FAQS
  1. What's the difference between a market order and a limit order?

    Buy and sell trades with market orders at the present stock price and execute limit orders if the stock price falls within ... Read Answer >>
  2. How is the economic order quantity model used in inventory management?

    Understand what types of costs make up total inventory costs, and learn how the economic order quantity model is used to ... Read Answer >>
  3. What is the difference between a stop and a market order?

    Learn about market orders and stop orders, how they are used and executed, and the main difference between stop orders and ... Read Answer >>
  4. How do I place a limit order online?

    Learn how a limit order is placed, the types of stocks it is most useful for and the specifications placed with it to suit ... Read Answer >>
  5. Why do limit orders cost more than market orders?

    Learn the difference between a market order and a limit order, and why a trader placing a limit order pays higher fees than ... Read Answer >>
  6. How do I place an order to buy or sell shares?

    Read a brief overview of how to open a brokerage account, how to buy and sell stock, and the different kinds of trade orders ... Read Answer >>
Hot Definitions
  1. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  2. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  3. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  4. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  5. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  6. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
Trading Center