| Contingency Order | |
 An order that is executed only when certain conditions of the security being traded, or another security, have been fulfilled. Such prerequisite conditions range in scope and depth. In a simple case, a contingency order may depend on the potential purchaser's ability to sell a different security in his or her portfolio to free the funds to make the purchase. In a more complicated situation, an options contingency order's execution may depend on the share price of the options' underlying stock |
|
 A stop-loss order can be viewed as a contingency order because it does not become a market order until the price of the stock being sold reaches a predetermined price. This type of order is very useful when applied to the sale or purchase of options. |
|
 Understanding Order Execution - The way in which your broker fulfills your orders can affect your costs. The Stop-loss Order - Make Sure You Use It - It's a simple but powerful tool that can help you implement your stock-investment strategy. Find out how. What is the difference between a stop and a limit order? |
|
Related Terms
 |