Investopedia explains '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.
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