Principal Orders


DEFINITION of 'Principal Orders'

A type of order carried out by a broker-dealer which involves the broker-dealer buying or selling for its own account and at its own risk, as opposed to carrying out trades for the brokerage's clients.

BREAKING DOWN 'Principal Orders'

When a broker-dealer is acting on its own behalf, as opposed to brokering transactions for its clients, it must properly denote to the exchange that it is doing so. These kinds of transactions are also known as "principal trades".

  1. Execution

    The completion of a buy or sell order for a security. The execution ...
  2. Exchange

    A marketplace in which securities, commodities, derivatives and ...
  3. Principal

    1. The amount borrowed or the amount still owed on a loan, separate ...
  4. Front Running

    The unethical practice of a broker trading an equity based on ...
  5. Order

    An investor's instructions to a broker or brokerage firm to purchase ...
  6. Agent

    1. An individual or firm that places securities transactions ...
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