alternative order

Alternative order

Used in context of general equities. Order giving a broker a choice between two courses of action, either to buy or sell, never both. Execution of one course automatically eliminates the other. An example is a combination buy limit/ buy stop order, where the buy limit is below the current market and the buy stop is above. If the order is for one unit of trading, when one part of the order is executed on the occurrence of one alternative, the order on the other alternative is to be treated as cancelled. If the order is for an amount of more than one unit of trading, the number of units executed determines the amount of the alternative order to be treated as cancelled. Sometimes known as One Cancels the Other. Also see: Either-or order.

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alternative order

A customer order that instructs a broker to complete only one of two possible transactions. For example, an investor holding shares of USX Corp. that were acquired at $45 may have a price target of $75 but may wish to limit any losses to a maximum of $5 per share. The investor would place a limit order to sell at $75 and a stop order to sell at $40. Whichever occurs first will trigger a transaction and cancel the other part of the order. Also called combination order, either-or order, one-cancels-the-other order.