do not reduce


Also found in: Acronyms.

Do Not Reduce Order

In a limit order following the ex-dividend date, an instruction not to reduce the limit price by the amount of the dividend. Most of the time, following the ex-dividend date, the price of the limit order is reduced because the coming dividend will belong to the current owner, rather than the buyer. One issues a do not reduce order if one believes that demand for the stock justifies the higher price.

do not reduce

An addition to a limit order to buy or a stop order to sell stock that states that the price will not automatically be reduced when the stock goes ex-dividend. Without this instruction, the price is reduced by the amount of the dividend to be paid.