Risk-reducing orders Sample Clauses

Risk-reducing orders. The placing of orders (e.g., "stop loss” orders, or "limit" orders) which are intended to limit losses to certain amounts may not be effective many a time because rapid movement in market conditions may make it impossible to execute such orders.

Risk-reducing orders. Most exchanges have a facility for investors to place “limit orders” “stop loss orders,” etc. The placing of such orders )e.g., “stop - loss” orders or “limit” orders( which are intended to limit losses to certain amounts may not be effective many a time because rapid movement in market conditions may make it impossible to execute such orders. A “market” order will be executed promptly subject to availability of orders on opposite side, without regard to price and that, while the client may receive a prompt execution of a “market” order, the execution may be at the availability of orders on opposite execution of a “market” order, the execution may be at available prices of outstanding orders, which satisfy the order quantity on price time priority. It may be understood that these prices may be significantly different from the last traded price or the best price in that security. A “limit” order will be executed only at the “limit” price specified for the order or a better price. However, while the client receives price protection, there is a possibility that the order may not be executed at all. A stop loss order is generally paced “away” from the current price of a stock/contract and such order gets activated if and when the stock/ contract reaches or trades through, the stop price. Sell stop orders are entered ordinarily below the current price and buy stop orders are entered ordinarily above the current price. When the stock reaches the pre-determined price, or trades through such price the stop - loss order converts to market/limit order and is executed at the limit or better. There is no assurance and therefore that the limit order will be executable since a stock/contract might penetrate the pre-determined price, in which case, the risk of such order not getting executed arises, just as with a regular limit order.

Risk-reducing orders. The customers can place orders for limiting the losses to certain amounts, such as Limit Orders, Stop Loss Orders, and Market Orders etc. Customers must ask their brokers for detailed understanding of these order types. Customers must acknowledge that placement of such orders for limiting losses to certain extent may not always be an effective tool due to rapid movements in the prices of securities and, as a result, such orders may not be executed.