Contingency Order


DEFINITION of 'Contingency Order'

An order that is executed only when certain conditions of the security being traded, or another security, have been fulfilled. Such prerequisite conditions range in scope and depth. In a simple case, a contingency order may depend on the potential purchaser's ability to sell a different security in his or her portfolio to free the funds to make the purchase. In a more complicated situation, an options contingency order's execution may depend on the share price of the options' underlying stock

BREAKING DOWN 'Contingency Order'

A stop-loss order can be viewed as a contingency order because it does not become a market order until the price of the stock being sold reaches a predetermined price. This type of order is very useful when applied to the sale or purchase of options.

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  5. Order

    An investor's instructions to a broker or brokerage firm to purchase ...
  6. Market Order

    An order that an investor makes through a broker or brokerage ...
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