DEFINITION of 'Contingent Order'

1. An order involving the simultaneous execution of two or more transactions.

2. An order whose execution depends upon the execution and/or price of another security.

BREAKING DOWN 'Contingent Order'

These types of orders are generally placed for option strategies where two separate transactions must occur at the same time. An example is a buy-write, where an investor would buy a stock and sell a call simultaneously.

RELATED TERMS
  1. Stock Ahead

    A situation in which an order is placed, but not executed, because ...
  2. At The Highest Possible Price

    A type of security trading designation that instructs a brokerage ...
  3. Continuous Trading

    A method of transacting different securities orders. Continuous ...
  4. Order

    An investor's instructions to a broker or brokerage firm to purchase ...
  5. Limit Order

    An order placed with a brokerage to buy or sell a set number ...
  6. Execution

    The completion of a buy or sell order for a security. The execution ...
Related Articles
  1. Trading

    Understanding Order Execution

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

    Explaining Market Orders

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

    The Basics Of Trading A Stock

    Taking control of your portfolio means knowing what orders to use when buying or selling stocks.
  4. 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.
  5. 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 ...
  6. Trading

    Evaluating Executive Compensation

    Find out how to determine whether a CEO is being overpaid.
  7. Investing

    Understanding Immediate-or-Cancel Orders

    A trader places an immediate-or-cancel order to immediately execute a trade in full or in part. Any part of the order that remains unfulfilled is canceled.
  8. Investing

    Tips For Investors In Volatile Markets

    Find out what to look out for when trading during market instability.
  9. 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 ...
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 do financial advisors execute trades?

    Understand how financial advisors normally execute an investor's trades. Learn about the different type of markets and exchanges ... 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. 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 >>
  5. 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 >>
Hot Definitions
  1. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  2. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  3. 403(b) Plan

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

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  5. 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 ...
  6. Job Market

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