Ever place an order with a friend going to the donut shop for a coffee and a raspberry jelly donut, but to get an apple jelly donut if the shop has run out of raspberry? Last thing you want is the coffee without the donut.
A Day-Around Order is a similar kind of securities order. It gives a contingency in order to get an execution done, since orders have to be followed explicitly by law, and a previous order must be cancelled before a new order replaces it. If, say you wished to buy 100 shares of a stock with a limit order of $5, but news comes out before the open, and that stock opens at $5.50 and starts to climb, you could put a Day-Around-Order that adds a $5.65 limit for the 100 shares. This allows for the cancelation for compliance purposes, and the execution to be completed so you still get your shares.
A market order could work to get you executed, but then you would automatically get filled if the stock opened perhaps at $6, which might be higher than your acceptable entry point.
Related or Semi-related Video
Finance: What is an All or None Order?71 Views
finance a la shmoop what is an all-or-none order oh you'd think that
spoiled brats only live on playgrounds of participation trophy cities hmm but [Boys holding participation trophies]
that is oh so sadly not true they roam the wild hallways of Wall Street
investment firms in droves and all-or-none order means that a buyer or
seller of stock either wants all of their shares bought or sold or none of
them and yes this applies to bonds preferred stocks and other random [Man discussing stocks and bonds]
hybrids as well.....A buyer has a portfolio of 500 million dollars in small cap
growth stocks generally speaking she's told her clients that she won't take
less than a 2% position in anything because she wants to be able to focus on
a core group of stocks and really be on top of any big movements hoping to sell [Stocks in a sack land on a table]
the shares before well, any huge problems holding so in this case she's
found a company she loves an appropriately named coal company for [Woman looking through binoculars in her car]
spoiled investors called mine mine mine the only problem is that the stock is
thinly traded that is not a ton of shares trade every day and she needs to
own either ten million dollars worth of stock which would be a two percent
position or she doesn't want to own any the stock at the moment is trading at
ten dollars and seven cents a share and she wants it at ten bucks or better...
well at ten dollars and one penny she has no interest whatsoever in that stock [Stock graph for mine mine mine company]
at 10.00 she's a buyer so that is her limit order but on this all-or-none
order she waits and waits and waits knowing that sometimes all-or-none [Woman looking at laptop waiting for the stocks]
orders simply never get filled other times they get filled scarily too fast
like the seller knew something the buyer did not but along comes a bad market day
the White House says something stupid what are the odds? and the market tanks for
an hour and blam she is the proud new owner of a million shares of mine mine
mine good for her those shares are now all hers hers hers [Pigeon poops on mans head]
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An unsolicited order is an order to buy or sell a security demanded by the client.