DEFINITION of 'Non-Directed Order'

A directive by a seller to a broker instructing the latter to buy or sell a security on the broker's choice of exchanges. Many stocks, but especially foreign issues, are listed on more than one exchange; a non-directed order allows the broker to decide which exchange to purchase the stock or other security from. An order is considered to be directed unless the investor explicitly states otherwise.

BREAKING DOWN 'Non-Directed Order'

Prior to automated trading, most trades were, by default, directed, as brokers dealt primarily with specific United States exchanges. Since the advent of computers and online brokerage houses, however, clients have much greater freedom to tailor their orders - and this includes having a broker pick the exchange. Of course, it is assumed that non-directed orders will be filled at the exchange offering the best terms.

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