DEFINITION of At The Lowest Possible Price
At the lowest possible price is a type of security trading designation that instructs a brokerage to execute a buy order at the lowest price that can be found. At the lowest possible price does not involve a maximum or minimum price that an order must be filled at, but does instruct the broker to get as low a price as possible as quickly as possible.
BREAKING DOWN At The Lowest Possible Price
At the lowest possible price requests are more commonly found in markets with limited liquidity or low trading volumes. This is because investors trading securities with lower liquidity have fewer options when it comes to executing a buy or sell order. The market for a thinly traded security is more limited and other parties are better able to demand pricing that may not be ideal for the investor. While investing in securities in limited markets may bring an investor a higher rate of return than investments made in more developed and liquid markets, the investor does run the risk of not being able to quickly enter or exit the market. However, investors often prefer to purchase securities at the lowest possible price because it provides the greatest opportunity for profit.
Example involving Lowest Possible Price
For example, an investor trading currency options in lightly traded currencies (i.e. not the dollar, euro, yen, etc.) may find it difficult to execute an order if other traders are not participating in the market in large enough numbers. While the investor may want to execute a buy order at the lowest possible price, it is possible that the investor will have to accept a higher price. Using an at the lowest possible price order ensures that the investor gets a low price, even if not as low as desired.