1. Orders

2. Orders: Classification Size specifications Time specifications Price Specifications

3. Size specifications Board (Round) Lot Multiple of 100 shares Odd Lot Between 1 and 99 shares All-or-None (AON) The broker has to buy/sell all the shares specified by the investors, otherwise the order becomes void. Any-Part Any number of shares bought/sold is acceptable

4. Time specifications Day Order Has to be filled during the day it was entered. The order becomes void the next day. Fill-or-Kill (FOK)‏ Similar to a Day Order, has to be filled on the spot. Good Through.… Has to be filled within a certain time period, usually several weeks. Good-Till-Cancelled (GTC or Open Order) Remains in effect as specified until cancelled by the investor.

5. Price Specifications At the Market Has to be executed at the best available price of the moment Limit Order Executed only if a specified price (or better) can be obtained Stop Order(Stop-Loss)‏ Executed if a certain trigger price (or worse) is reached Stop-Limit Order Executed if the price is within a specified range

6. Case: Assume a dealer has received the following orders A Buy: MSFT Size: 500 shares Time: FOK Price: At the market B Buy: MSFT Size: 1,000 shares Time: GTC Price: Limit at $71 C Buy: MSFT Size:300 shares Time: Day Price: Stop at $ 72 D Sell: MSFT Size: 400 shares Time: GTC Price: Limit at $69 E Sell: MSFT Size: 600 shares Time: Good through December 20 Price: Stop at $ 68 F Sell: MSFT Size: 500 shares Time:Day Price:Stop-Limit $65 to $70

7. Order execution

8. Order execution

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13. Order execution

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