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Simple English definitions for legal terms
open order
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A quick definition of open order:
An open order is a type of instruction given to a broker to buy or sell a security. It remains in effect until the broker fills it or the customer cancels it. This is different from a day order, which is only valid for one day. Other types of orders include limit orders, which specify a price, and market orders, which execute at the best available price. Stop orders are triggered when the security's price reaches a certain level, while fill-or-kill orders must be executed immediately or not at all.A more thorough explanation:
Definition: An instruction or command given to a broker to buy or sell securities that remains in effect until it is filled or canceled by the customer.
Example: An investor places an open order with their broker to buy 100 shares of XYZ stock at $50 per share. The order will remain open until the broker is able to find a seller willing to sell the shares at that price or until the investor cancels the order.
This example illustrates how an open order works in the context of buying and selling securities. The investor has given their broker a specific instruction to buy a certain number of shares at a specific price, but the order will remain open until it is filled or canceled. This allows the broker to continue searching for a seller who is willing to sell the shares at the desired price, even if it takes some time.