What is a conditional order?

Conditional orders are investment orders that are structured from two or more steps that must occur in the specified sequence. Until the first step in the process is completed, the broker is not entitled to move to the second step in the sequence. A serious order helps to ensure that certain conditions should take place before the investor is involved in the purchase or sale of various shares and other securities forms.

One of the most common structures for a conditional order will include two sub -orders involving purchase and sale of shares or security. For example, an investor can present an order to a broker that determines that certain shares cannot be purchased until it is possible to sell another share in the investor's portfolio at a set price per share. The broker will stick to the orders and will not attempt to start the sale of existing shares until it reaches a certain price. After successful sale of shares under the conditions set by investor, the broker can freely switch to the second part of the conditional order and purchase AKCII shares mentioned in the order investor.

Sometimes referred to as a clean order, a conditional order always includes at least two steps, but may include more if necessary to achieve the desired effect. The investor may decide to issue a conditional order in the context of a long -term plan to obtain certain stock options without investing further funds in the portfolio. At the same time, the purpose of the emergency order may be to take advantage of short -term market conditions, allowing the investor to get in and get out of the shares in a way that creates a financial advantage.

It is easiest to think of the basic structure of the conditional order as a simple approach "If this happens, do it". Some events must be held before Fiprocess Pal in order, if there is a desired effect. Once the conditions are favorable, the broker passes to ZBThe steps in the process and order are considered complete and fully implemented.