Discretion

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Discretion

Freedom given to the floor broker by an investor to use his judgment regarding the execution of an order. Discretion can be limited, as in the case of a limit order that gives the floor broker some distance from the stated limit price to use his judgment in executing the order. Discretion can also be unlimited, as in the case of a market-not-held order. See also: Market Not Held Order.

Discretion

The ability to make decisions on one's own without the need to consult others. For example, a discretionary account gives a broker the right to make significant investment decisions without permission from or even consultation with the account's owner. Likewise, certain investments give an investor more discretion than others. An option contract allows but does not require the holder to buy (or sell) the underlying, while a futures contract requires the exchange to take place.
References in periodicals archive ?
Although Justice Wright, on 3 June 1992, discretionally refused the mandamus order sought by NBH-Peko and declined to make the order absolute, he clearly forewarned the Tasmania Police to act against the Burnie picketing.
The escalating oil prices offer a powerful tool whereby major oil exporters could discretionally, reduce, or increase, production to back their political demands.
Brown Shipley anticipates it will have pounds 150 million of funds under management within its first year, providing high net worth clients with discretionally managed investment portfolios, fund management, pension, estate planning and banking services.