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.

RELATED TERMS
  1. Directed Order

    A customer order to buy or sell securities, wherein the customer ...
  2. Each Way

    A slang phrase used when a broker earns commissions from both ...
  3. Carrying Broker

    A commodities or securities broker who provides back office functions ...
  4. Deep Discount Broker

    An agent that mediates sales and exchanges between securities ...
  5. Two Dollar Broker

    A floor broker who executes orders for other brokers who cannot ...
  6. Outside Broker

    1. A real estate salesperson and deal facilitator who works for ...
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

    Picking Your First Broker

    If you're a rookie investor, your first big investment decision should be an informed one. Read about how to choose your first broker here.
  3. Trading

    The Best Low-Cost, Web-Based Trading Brokers

    With this table, investors can differentiate between top low-cost, web-based trading brokers by price, capabilities, and offerings.
  4. Trading

    Broker Summary: Interactive Brokers

    Learn more about IB, an online broker specializing in routing orders and executing and processing trades on more than 90 electronic exchanges and trading venues worldwide.
  5. Personal Finance

    Research Report Red Flags For Brokers

    Discover how to look past analysts' ratings to find winning stocks for your clients.
  6. Financial Advisor

    How Brokerage Fees Work

    What you need to know about fees when choosing between a full service and discount broker.
  7. Financial Advisor

    Evaluating Your Stock Broker

    Make sure you're getting the best service by staying informed and involved.
  8. Investing

    Why Use a Discount Broker?

    A discount broker is a stockbroker that does not offer clients investment advice, but trades shares for a smaller commission than a full-service broker.
  9. Managing Wealth

    Broker Or Trader: Which Career Is Right For You?

    Both brokers and traders buy and sell securities, but there are some subtle differences between the two careers.
RELATED FAQS
  1. There are so many stockbrokers out there. How do I go about choosing the best one ...

    If you decide that you have the knowledge and experience to take on stock investing, or if you feel you would like to give ... Read Answer >>
  2. What is the difference between a broker and a market maker?

    A broker is an intermediary who has a license to buy and sell securities on a client's behalf. Stockbrokers coordinate contracts ... Read Answer >>
  3. My broker just sold securities out of my account without my permission. Is this legal?

    Your broker's actions are not legal unless he or she sold the securities under certain conditions. Let's look at the two ... Read Answer >>
  4. How do I place an order to buy or sell shares?

    Read a brief overview of how to open a brokerage account, how to buy and sell stock, and the different kinds of trade orders ... Read Answer >>
Hot Definitions
  1. Private Placement

    The sale of securities to a relatively small number of select investors as a way of raising capital.
  2. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  3. Backward Integration

    A form of vertical integration that involves the purchase of suppliers. Companies will pursue backward integration when it ...
  4. Pari-passu

    A Latin phrase meaning "equal footing" that describes situations where two or more assets, securities, creditors or obligations ...
  5. Interest Rate Swap

    An agreement between two parties (known as counterparties) where one stream of future interest payments is exchanged for ...
  6. Custodian

    A financial institution that holds customers' securities for safekeeping so as to minimize the risk of their theft or loss. ...
Trading Center