Cancel Former Order - CFO

AAA

DEFINITION of 'Cancel Former Order - CFO'

An order from an investor to a broker, to cancel a previously placed order that has not yet been filled. Cancel former order (CFO) is used by an investor who has changed his or her mind about a securities transaction that has not yet been executed or filled, and wishes to change one or more of the order parameters, such as price or amount. By canceling the previous order, a CFO ensures that no order duplication takes place if the client generates a new order for the same security.

BREAKING DOWN 'Cancel Former Order - CFO'

It goes without saying that a CFO can only be used to replace unfilled orders; orders where a fill has been received are binding contracts and cannot be revoked.

A CFO is often used in cases where market conditions prompt the investor to change the order parameters. For example, in a plunging market the investor may use a CFO to lower the price at which he or she wants to purchase a security.

Conversely, if a stock is rising rapidly, the investor may change a limit order to a market order to ensure that an order fill is obtained. As an example, assume an investor wants to buy 100 shares of Widget Co, which is trading at $10.25, and places a limit order at $10.00. If Widget Co begins rising on news of a positive development and is now trading at $10.50, the investor may CFO his or her previous order and place a new market order, so as to buy 100 shares of Widget Co at the current market price.

RELATED TERMS
  1. Limit Order

    An order placed with a brokerage to buy or sell a set number ...
  2. Day-Around Order

    An order that cancels and replaces a previously submitted day ...
  3. Order

    An investor's instructions to a broker or brokerage firm to purchase ...
  4. Stop Order

    An order to buy or sell a security when its price surpasses a ...
  5. Immediate Or Cancel Order - IOC

    An order to buy or sell a security that if not immediately filled, ...
  6. Market Order

    An order that an investor makes through a broker or brokerage ...
Related Articles
  1. Options & Futures

    Trailing-Stop/Stop-Loss Combo Leads To Winning Trades

    Combine trailing stops with stop-loss orders to reduce risk and protect portfolio value.
  2. Options & Futures

    Forget The Stop, You've Got Options

    Using options instead of stop-loss orders adds finesse and control in limiting losses.
  3. Mutual Funds & ETFs

    6 Proven Methods For Selling Stocks

    These common techniques can help investors take some of the emotion out of deciding when to sell a stock.
  4. Forex Education

    How To Place Orders With A Forex Broker

    Learn how to set each type of stop and limit when trading currencies.
  5. Active Trading Fundamentals

    The Basics Of Trading A Stock

    Taking control of your portfolio means knowing what orders to use when buying or selling stocks.
  6. Options & Futures

    A Logical Method Of Stop Placement

    If holding on to losing trades is human nature, this tool will help protect you from yourself.
  7. Investing News

    The Brief: Where Is the Bottom?

    Where is the market going today after yesterday's bumpy ride?
  8. Investing

    Finding Value in the Selloff Rubble

    Globally and in the United States, stocks are now in correction mode, with the recent erosion in equities in emerging markets and Europe in a bear market.
  9. Investing Basics

    6 Smart Strategies to Invest Your Extra Cash Now

    The world's stock markets are shaky, to say the least. Should you hold onto your cash or bargain hunt?
  10. Investing

    6 Reasons Why Every Investor Should Consider ETFs

    Once you understand the benefits of ETFs, you’ll see how they could be an exciting and smart way to help meet your financial goals. Here some key facts.
RELATED FAQS
  1. Where do penny stocks trade?

    Generally, penny stocks are traded through the use of the Over the Counter Bulletin Board (OTCBB) and through pink sheets. ... Read Full Answer >>
  2. Where can I buy penny stocks?

    Some penny stocks, those using the definition of trading for less than $5 per share, are traded on regular exchanges such ... Read Full Answer >>
  3. How does the stock market react to changes in the Federal Funds Rate?

    The stock market reacts to changes in the federal funds rate in various ways depending on where it is in the business cycle. ... Read Full Answer >>
  4. What are the requirements for being a Public Limited Company?

    The requirements for an entity to be considered a public limited company (PLC) include registration requirements, establishing ... Read Full Answer >>
  5. Is there a difference between financial spread betting and arbitrage?

    Financial spread betting is a type of speculation that involves a highly leveraged derivative product, whereas arbitrage ... Read Full Answer >>
  6. How do I place an order to buy or sell shares?

    It is easy to get started buying and selling stocks, especially with the advancements in online trading since the turn of ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  2. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
  3. Gorilla

    A company that dominates an industry without having a complete monopoly. A gorilla firm has large control of the pricing ...
  4. Elephants

    Slang for large institutions that have the funds to make high volumes trades. Due to the large volumes of stock that elephants ...
  5. Widow's Exemption

    In general terms, a widow's exemption refers to the amount that can be deducted from taxable income by a widow, thereby reducing ...
  6. Wedding Warrant

    A warrant that can only be exercised if the host asset, typically a bond or preferred stock, is surrendered. Until the call ...
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!