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.
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Finance: What is an Unsolicited Order?3 Views
finance a la shmoop what is an unsolicited order
alright well people it's just an order like to buy or sell a stock or bond or [Definition of unsolicited orders]
derivative security that you instruct your broker to execute all on your
lonesome that is the broker or another professional did not recommend you doing [Guy stood in front of Walmart]
that trade you did research on your own consulted alpha magazine and The Motley [The magazine on a disk]
Fool noted the massive number of Spinney fidgets things that were selling off the
shelves the last time you visited Walmart and decided to make an investing
statement based on that observation and in placing an unsolicited order you are
legally on your own if things fail ie the broker is exempt from any liability [Exempt from liability stamp]
for having made an incorrect or improper recommendation or whatever in real life
brokers have so many layers of legal coverage above their recommendations [A wedding cake]
that no it really doesn't matter if they sell you 20 bad stocks in a row you just
have to be appropriate for what you checked on the boxes in the form that [Investment criteria checklist]
you sent to them that well they're still likely immune to prosecution anyway yeah
no recourse or well your only recourse is to just fire them and hire this guy [Bonzo the chimp appears]
to pick stocks for yes yeah asking yourself well really how much worse
could he do had your broker been the one to stumble on the many sold out signs of
spinny things at Walmart and then she called you to suggest you buy shares of [Broker calling a client]
spinny fidget time-wasters.com well then the order would have been
considered a solicited one and in theory solicited orders carry a higher weight [Exempt from liability stamp is wiped away]
of scrutiny should something go awry and regulators get involved and basically it
revolves around that recommendation being appropriate to the risk levels and
duration levels and other levels of investing prowess that you proffer that
you actually have and yeah those regulators they mean business you really [Regulator holding a baseball bat]
don't want to be on their bad side
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