Closing Offset (CO) Order

AAA

DEFINITION of 'Closing Offset (CO) Order'

A limit order that allows the purchase or sale of a security in order to offset an imbalance at market close. A closing offset order is accepted until market close, and must contain a limit price and have a round lot quantity. A closing offset order can be canceled or reduced by 3:45 pm for legitimate errors, but cannot be canceled after 3:58 pm.

INVESTOPEDIA EXPLAINS 'Closing Offset (CO) Order'

Closing offset orders allow traders to offset imbalances at market close by providing liquidity. This is important in situations in which incoming buy or sell orders meant to offset an imbalance create the opposite. For example, incoming orders to offset a buy imbalance lead to the creation of a sell imbalance.

The New York Stock Exchange (NYSE) proposed the idea of a closing offset order to allow traders to execute trades closer to the end of the trading day. It is designed to help traders who have to buy or sell a security at closing prices. Mutual funds, for example, use closing offset orders if they are designed to track the performance of a particular index. The introduction of the closing offset orders gives traders more time to collect and process trading orders.

 

RELATED TERMS
  1. Limit Order

    An order placed with a brokerage to buy or sell a set number ...
  2. Limit Order Information System ...

    An electronic system used by specialists in the stock market. ...
  3. Buy Limit Order

    An order to purchase a security at or below a specified price. ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop ...
  5. Limit Order Book

    A record of unexecuted limit orders maintained by the specialist. ...
  6. Bidding Up - Securities

    The act of increasing the price an investor is willing to pay ...
Related Articles
  1. Trading Strategies

    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 ...
  2. Trading Strategies

    Patience Is A Trader's Virtue

    Waiting may be the biggest key to reeling in that trophy investment.
  3. Investing Basics

    Narrow Your Range With Stop-Limit Orders

    With stop-limit orders, buyers protect themselves from prices too high for their tastes.
  4. Trading Strategies

    How to Use Trailing Stops

    A trailing stop is an order to buy or sell a security if it moves in an unfavorable direction.
  5. Active Trading

    Pinpoint Winning Trade Entries With Filters And Triggers

    These tools will help you enter at high-probability points and ensure you trade within your set strategy.
  6. Active Trading Fundamentals

    Trailing-Stop Techniques

    The important decision to exit a position must be based on more than emotion if you want to be a disciplined trader.
  7. Investing

    Stop Limit Orders

    A stop limit is an order to sell or buy a stock once it reaches a certain level, but only if the shareholder can obtain a specified price.
  8. Investing Basics

    Understanding The Basics of A Stop-Limit Order

    There are many techniques used by investors and traders to restrict losses or lock in gains. The stop-limit order is one such technique.
  9. Investing Basics

    Stop Loss Order Strategy

    A stop loss order is an order placed with a broker to sell a stock immediately if it drops to a certain price. It's a common way for investors to protect themselves from the possibility of a ...
  10. Trading Systems & Software

    Darvas Box Traps Elusive Returns

    Follow a modern trade to see how this old strategy still captures profits today.

You May Also Like

Hot Definitions
  1. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  2. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  3. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  4. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  5. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  6. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
Trading Center