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".

RELATED TERMS
  1. Broker-Dealer

    A person or firm in the business of buying and selling securities, ...
  2. Stuffing

    The act of selling undesirable securities from the broker-dealer's ...
  3. Upstairs Market

    The trading of securities, such as stocks, that occurs within ...
  4. Blind Brokering

    When brokerage firms ensure anonymity to both the buyer and the ...
  5. Broker's Call

    The interest rate charged by banks on loans made to broker-dealers, ...
  6. Call Loan Rate

    The short term interest rate charged by banks on loans extended ...
Related Articles
  1. Financial Advisor

    What are the Different Types of Financial Advisors?

    There are two primary types of financial advisors: investment advisors and investment brokers, who work for broker-dealers.
  2. Financial Advisor

    How Brokers Are Compensated for Selling Bonds

    Find out how brokers are paid for selling bonds and how the transaction costs are passed on to the investor through a markup or commission.
  3. Professionals

    Series 63 Exam Prep: The Broker-Dealer

    Before you take the series 63, you need to understand jurisdiction and how it affects broker-dealers.
  4. Financial Advisor

    Broker-Dealer Industry 101: The Landscape

    Independent broker-dealers are a great choice for experienced, self-starter planners who have established practices.
  5. Markets

    Steps to Starting Up an Independent Broker Dealer

    Launching your own broker-dealer is a lot of work, but the potential payoff is great, both personally and financially.
  6. Financial Advisor

    Should You Offer Alternative Investments?

    Find out what problems arise for financial representatives when they start to diversify their client offerings.
  7. Financial Advisor

    How the New Fiduciary Rule Will Hit Broker-Dealers

    While the new rules are likely to impact all financial advisors, it is expected that those in the brokerage world will be hit the hardest. Here's why.
  8. Investing

    Principal Trading and Agency Trading

    Ever wonder what happens behind the scenes when you buy or sell a stock? Read on and find out!
  9. Financial Advisor

    The Top 25 Broker-Dealer Firms in 2015

    The country's largest broker-dealer firms by annual revenue are clearly doing lots of things right, but they're also facing a massively shifting market.
  10. Retirement

    Financial Planners: Practice What You Preach

    "Do as I say and not as I do" doesn't make for a great professional reputation.
RELATED FAQS
  1. When an agent of a broker-dealer begins employment with another broker-dealer ... ...

    The correct answer is D). When an agent moves from one broker-dealer's employ to another, all parties are responsible for ... Read Answer >>
  2. ABC Broker-dealer has no office in state and transacts fewer than five trades during ...

    The correct answer is b. Under these circumstances, the broker-dealer is not required to register with the state and the ... Read Answer >>
  3. Do financial advisors need to be approved by FINRA?

    Learn about whether a financial advisor may be required to be approved by FINRA, and what exams a financial advisor needs ... Read Answer >>
  4. A sales representative solicits and executes a mutual fund trade ...

    The correct answer is c). This would be considered a private securities transaction, which is not permitted. All securities ... Read Answer >>
  5. When a corporation wishes to open a margin account with a broker-dealer ...

    The correct answer is b. Whenever a corporation opens an account with a broker-dealer, a resolution by the board of directors, ... Read Answer >>
  6. A sales representative or broker-dealer that violates the Uniform Securities Act ...

    The correct answer is a. The sales representative or broker-dealer is required to pay interest, court and attorney’s fees ... Read Answer >>
Hot Definitions
  1. AAA

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

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center