Definition of 'Firm Order'
1. A market order to buy or sell a security for a brokerage's proprietary account. A firm order requires a trader to be fully authorized by the brokerage before executing the transaction.
2. A buy or sell order executed by a broker for a client's account. This is not contingent on the customer's confirmation.
Investopedia explains 'Firm Order'
1. A firm order is made for the brokerage's equity portfolio and is held in the firm's trading account. Shares purchased under a firm order are held directly by the brokerage.
2. Full trading authorization is typically required for a broker to execute a transaction on behalf of a client without first confirming the order. This type of trade allows a client to benefit from any timely knowledge the broker may have.