Held order

Define held - To execute any order – one should have a strategy to handle the process, especially, for a volatile market, the overall process route and method of execution should be determined. A trader can place an order to buy equity from the market, when the terms prevailing in the market are favourable at the time of execution. Such "held orders" are based on prompt execution.

In general, orders belong to different categories –

• Market– It is an order used to buy and sell stocks as soon as possible at the best rate.
• Limit– It is the order where the client set a maximum purchase price or minimum sale price at which the trade can be executed.
• Stop limit – A firm can take order set at a specific price, which can be activated as a limit order using a transaction or quotation as the triggering event.
• Not-held – It gives the discretion to execute at a specific time and price.
• Day orders – It is valid until it is executed, or the next market close.
• GTC – It remains open until it is cancelled or executed.

The factors that are used to determine if an order is placed favourably or not, include -

• The character of the market for security (the price volatility, relative liquidity, pressure on communication)
• The size and type of transaction
• The number of markets checked
• The accessibility of the quotation
• The terms and conditions of the order (as communicated to the firm)

Investors should be aware that market and price volatility can affect execution of such orders. Like

• It may fully or partially be executed through multiple transactions at a substantial-ly different price from the quoted bid or offer or the last reported sale price.
• The opening price can possibly be different from the previous day closing.
• Locked markets are conditions that restrict immediate execution.
• Higher volatility can cause an imbalance between buy/ sell of IPOs.
• Financial order imbalance can be caused by a higher volume and backlogs.