Contingent Order

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. Leg

    A leg is one component of a derivatives trading strategy, in ...
  2. Spread

    1. The difference between the bid and the ask price of a security ...
  3. Strangle

    An options strategy where the investor holds a position in both ...
  4. Buy-Write

    A trading strategy that consists of writing call options on an ...
  5. Package Deal

    An order that contains a number of exchange or deposit items ...
  6. Bull Call Spread

    An options strategy that involves purchasing call options at ...
Related Articles
  1. Options & Futures

    Options Basics Tutorial

    Discover the world of options, from primary concepts to how options work and why you might use them.
  2. Trading Strategies

    Why Is Short Selling Legal? A Brief History

    In the U.S., before a short sale can occur, broker/dealers must have reasonable grounds to believe that shares can be borrowed and delivered on time.
  3. Active Trading Fundamentals

    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 ...
  4. Investing Basics

    The Basics Of The Bid-Ask Spread

    The bid-ask spread is essentially a negotiation in progress. To be successful, traders must be willing to take a stand and walk away in the bid-ask process through limit orders.
  5. Investing Basics

    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.
  6. Investing Basics

    Explaining Good ‘til Canceled

    A good ‘til canceled order remains in effect until an investor cancels a specific trade or executes it.
  7. Investing Basics

    Is it Risky to Invest in Options?

    Investing with options can be a great strategy, but you need to do your research first or the risks can outweigh the benefits.
  8. Investing Basics

    NYIF Instructor Series: "Fill or Kill" Order

    In this short instructional video Anton Theunissen explains what the "fill or kill" order is.
  9. Term

    What's an Alligator Spread?

    An alligator spread is a financial position that generates too many commissions to be profitable.
  10. Investing Basics

    NYIF Instructor Series: Odd Lot Orders

    In this short instructional video Jack Farmer explains what an odd lot order is and what the potential downsides are.
RELATED FAQS
  1. What's the difference between a straddle and a strangle?

    Straddles and strangles are both options strategies that allow the investor to gain on significant moves either up or down ... Read Full Answer >>
  2. What's the difference between a stop and a limit order?

    Different types of orders allow you to be more specific about how you'd like your broker to fulfill your trades. When you ... Read Full Answer >>
  3. How do hedge funds use equity options?

    With the growth in the size and number of hedge funds over the past decade, the interest in how these funds go about generating ... Read Full Answer >>
  4. 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 >>
  5. How do I set a strike price in foreign exchange trading?

    In trading with a foreign exchange, a trader can set a strike price for a currency pair by entering a limit order or a stop ... Read Full Answer >>
  6. What are common delta hedging strategies?

    The term delta refers to the change in price of an underlying stock or exchange-traded fund (ETF) as compared to the corresponding ... Read Full Answer >>
Hot Definitions
  1. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  2. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  3. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  4. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  5. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
Trading Center