Understanding Order Types

Each order type is a set of conditions: when it may trade, at what price, and what happens to the rest.

Which Rule Defines the Order?

• Options: the NYSE American and NYSE Arca options order types rules, neither applicable to trading on Pillar, price against the national best bid and offer (NBBO).
• Equities: the NYSE Arca equities rule also prices against the protected bid and offer. It defines no Stop Order, and its Directed Order goes to a named alternative trading system, not to a Market Maker as in options.

Which One-Liners Win Points?

• Options stop trigger: a trade at or through the stop price on the Exchange or another Market Center, or the Exchange bid (offer) quoted there. A triggered Stop Order can fill worse than its stop price; a triggered Stop Limit Order may not fill.
• Equity Market Order: unpriced, must be Day, and rejected or cancelled with no contra-side NBBO. Only Market Orders face the Trading Collar; Limit Order Price Protection rejects a Limit Order priced too far away.
• Immediate-or-cancel accepts a partial fill; fill-or-kill does not. An options all-or-none order survives arrival, undisplayed, and may execute solely against resting interest of sufficient size.
• Options orders are Day Orders unless otherwise specified, and a good-til-cancelled one is cancelled by a corporate action adjusting the contract. The equities rule's only time-in-force modifiers are Day and immediate-or-cancel.
• Not held: discretion as to price or time. An order entrusted to a Floor Broker is not held unless the client specifies otherwise.
• Equity intermarket sweep order: trades through a protected quotation only when marked, with simultaneous marked orders routed against the full displayed size of protected quotations on Away Markets superior to its limit price.

Which Auction Does Each Auction-Only Order Trade In?

Which Numbers Matter Most?

Which Gotchas Trip Students Up?

• Reserve Order: each replenished display quantity takes a new working time; the reserve interest keeps the original entry time.
• Pegged orders never route. A Market Pegged Order follows the contra side and may carry an offset; a Primary Pegged Order follows its own side, takes no offset, and is rejected on arrival into a locked or crossed protected quote.
• Self trade prevention: the incoming order's modifier controls, and nothing is prevented during an auction.
• Post-no-preference on a lock or cross of the NBBO: the plain order is cancelled, the blind one rests undisseminated, and the repricing one is repriced.

One-Breath Recap

Two NYSE options rules, priced against the national best bid and offer, and the NYSE Arca equities rule, which adds protected quotations, define these orders, and they do not match. In options, a triggered Stop Order becomes a Market Order and a Stop Limit Order a Limit Order. Immediate-or-cancel accepts a partial fill, fill-or-kill demands the whole order, and an options all-or-none order survives arrival to wait for resting size. In equities, the Trading Collar reaches Market Orders only, unfilled Auction-Only Order quantity is cancelled, pegged orders never route, and a sweep order trades through a protected quotation only when marked and sent with simultaneous orders against the full displayed size of protected quotations elsewhere superior to its limit price.

Need more than the recap? Read the full Understanding Order Types unit.