Overview
IMPORTANT NOTE: Regarding Allocation Instructions on Block Orders
Although Fidelity Brokerage Services LLC ("Fidelity") permits its advisor clients to enter block orders on behalf of their customers, pursuant to regulatory requirements, advisors must provide prompt and complete allocation instructions on block orders, including account designations or customer names, as well as the number of shares to be allocated per account. This information must be received by Fidelity no later than the following times on the day the block order is executed:
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Equities and Fixed Income Securities: 8:00 PM Eastern time.
NOTE: Allocations must be received electronically by 7:50 PM Eastern time.
- Options: 4:00 PM Eastern time
In the event that advisor allocations are not received by the times listed above, Fidelity reserves the right to take necessary action to limit market exposure. This may include initiating a buy in or sell out in the advisor's account and/or requiring full payment from the advisor. Fidelity will hold the advisor responsible for any losses, claims, damages or expenses (including attorney's fees) associated with such action.
Failure to adhere to this policy may result in limitations being placed on an advisor's future block trading capability.
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You use the Block Order Ticket to group orders of equities or options that are executed on the same day into what Fidelity refers to as a block. A block order can consist of one block order or of a group of several block orders for the same security and the
same order Action (e.g., Buy or Sell). No matter how many block orders there are for a given security and side, all allocations receive the same average execution price across all accounts.
You may create several block orders throughout the day and then allocate accounts to the combined block order at this average execution price. You must create and transmit the allocations to Fidelity by 8:00 p.m. Eastern time of the same day. However,
you cannot allocate block orders until there is at least one execution on the block.
Accessing the Block Order Ticket
- Select Trade > Order Ticket > Block. The Block Order Ticket screen displays.
- From this screen you can create a Block Order.
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After creating an order, you can:
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Ignore the information you entered and reset the fields of the ticket to their default settings.
OR
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Send it to market and display it in the Sent Blocks Orders List.
OR
- Save it to the Unsent Blocks Orders List so you can send it at a later time.
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Creating a Block Order
NOTE:
- At any point, you can select the Close order ticket without saving changes link to ignore the ticket settings you may have made up to that point and close the Block Order ticket.
- Select the Reset Ticket button to return all fields on the Block Order Ticket to their default settings.
- See the Block Order Ticket Field Definitions for assistance in completing the order ticket.
- The Order Type drop-down list determines the order ticket type that displays. Choose Block from the available selections.
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Using the associated drop-down list, you may change the Block Account specified by default for the order.
NOTE: Your firm may or may not have more than one block trading account. See the Block Order Ticket Trade Preferences for additional information on establishing a default Block Account.
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Select the order Action from the drop-down list; options are: Buy, Sell, Sell Short, Buy Calls to Open, Buy Calls to Close, Sell Calls to Open,
Sell Calls to Close, Buy Puts to Open, Buy Puts to Close, Sell Puts to Open, and Sell Puts to Close.
NOTE: Your selection impacts whether some additional fields display.
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Specify the Quantity for the order.
NOTE: This value is labeled Shares for equities or Contracts for options.
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Specify the security to use in the block order by entering the Symbol or CUSIP or by looking up this information by selecting the Magnifying Glass icon.
NOTE: If you are creating a block order for an option, the Option Chain icon displays instead of the Magnifying Glass icon; select this icon to display the Option Chain Search pop-up screen that helps you to locate the desired security.
- Select the desired entry in the pop-up window that displays.
- When the Symbol/CUSIP field is populated, a Quote link displays. Select this link to display a pop-up screen containing real-time, pricing information related to your selection.
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Enter the Price Type of the order; options are: Market, Limit, Stop Loss, Stop Limit, Trailing Stop Loss by $, Trailing Stop Loss by %,
Trailing Stop Limit by $, and Trailing Stop Limit by %.
NOTE: Based on your selection, additional fields may display.
Stop Limit and the Trailing Stop selections are available for equities only.
- If your Price Type selection is Limit or Stop Limit, the Limit Price field displays; complete the field as required.
- If your Price Type selection is Stop Loss or Stop Limit, the Stop Price field displays; complete the field as required.
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If your Price Type selection is Trailing Stop Loss (% or $) or Trailing Stop Limit (% or $), the Trail Amount % or $ field
(respectively) displays; complete the field as required.
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If your Price Type selection is Trailing Stop Loss (% or $) or Trailing Stop Limit (% or $), the Based On setting displays.
Make a selection in the drop-down list; selections are Last (the default), Bid, and Ask.
NOTE: Making one of these selections provides greater flexibility in setting the trigger value for a Trailing Stop order.
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Using the drop-down list, specify the Time in Force for the order.
NOTE: The options that display are based on your Price Type menu selection; possible selections are
Day, Good Til Canceled, Fill or Kill, and Immediate or Cancel.
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If your Time in Force selection is Good Til Canceled, optionally specify an Expiration Date in the field that displays.
NOTE: The system default Expiration Date is 180 days for Equities or the contract's expiration for Options.
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If your Price Type selection is Limit, Stop Limit, or Trailing Stop Limit (% or $), optionally specify the Special Conditions for the order
(if any) using the associated drop-down list; options are: All or None, Do Not Reduce, All or None/Do Not Reduce, or Not Held.
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If entitled, select the Select link associated with the Algorithm field to apply an algorithmic strategy to the order; an Algorithm pop-up screen displays. Complete
the various fields on the screen (based on the algorithm selected) and select the Add button to apply the algorithm to the order and close the pop-up screen. You can select the Cancel without making changes link
to ignore the selections you made on the Algorithm pop-up screen and close it.
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Once all fields are completed, select one of the following buttons:
- Reset Ticket: Returns all ticket fields to their default settings, including any specified preferences.
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Send Now: Sends the order to market and places it in the Sent Blocks Orders List. A confirmation pop-up screen displays notifying you whether the order was successful and sent to the market or if it encountered errors and failed.
NOTE: This button does not display if you do not have the appropriate entitlement.
- Save Order: Saves the order to the Unsent Blocks Orders List. A confirmation screen displays; it contains the order details along with an indicator as to whether the order was successful or encountered an error.
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If you saved the order, from the confirmation screen, you can:
- Select the Close link to close the confirmation screen after viewing the order information.
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Select the Block Details button to view all associated block orders and allocations. Block orders and allocations are considered to be associated if they have the same Block Account Number, Symbol/CUSIP,
and Action; multiple block orders and/or allocations display on this screen if they match this criteria.
NOTE: The goal is to allocate the Executed share/contract amount of these orders completely by the end of the business day.
- Select the View Orders button to close the confirmation screen and display the Unsent Blocks Orders List.
- Select the Place Another Trade button to close the confirmation screen and display a new Block Order ticket.
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To display the Block Details screen so you can create allocations for a block order, do one of the following:
- Highlight a block order and select the Block Details button below the list.
OR
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Right-click a block order and select the Block Details entry in the shortcut menu that displays.
NOTE: Please see the Block Details topic and the Block Allocation section of the Allocation Order Ticket topic for information on allocating block orders.
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Algorithmic Orders
NOTE:
- The ability to create algorithmic orders is an entitlement. Therefore, you may not have access to this feature.
- You can cancel an algorithmic order, but you CANNOT cancel and replace one.
Overview
Algorithmic Strategies are quantitative models created from analyzing historic trades patterns of given security. Based on specific benchmarks or uniquely designed models, they determine time intervals when one can trade the security to obtain the
best price. Algorithms are used to help minimize the potential market impact of trading a large position and to help meet specific trading parameters. You may benefit from proven methodologies designed to help you obtain your chosen benchmark when
you take advantage of Fidelity Capital Markets Services' (FCMS) Algorithmic Strategies, Model Trade Execution (MTRX)SM. FCMS' MTRX is a trading tool that provides a number of Algorithmic Strategies to help traders meet their desired outcome.
After you select a benchmark, MTRX executes the trade using the specified algorithm.
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Benefits
You may wish to use Algorithmic Orders for the following reasons:
- Stop a trade while in progress if market conditions or your desires change
- Meet a desired outcome.
- Implement proven methodologies designed to help you to obtain your chosen benchmark.
- Use specialized algorithms to execute a trade.
- FCMS acts as an agency broker.
- Provide access to sophisticated order placement and liquidity.
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Supported Types/Strategies
Fidelity supports eight algorithmic order types or strategies. Each strategy uses different algorithms to either build or liquidate a position. Each algorithm has a set of variables (start time, end time, etc.) associated with it that describe the
execution details for the order. Each variable, with the exception of target price (since it could be any amount), has a default value and a set of acceptable parameters for the order.
- Volume Weighted Average Price (VWAP): Ensures that the trade will take place at the average-weighted price of the day or lower (if it is purchased) or higher (if it is a sale). VWAP will fill an order in its entirety.
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Time Weighted Average Price (TWAP): Uses a flatter model, indicating more evenly spaced trades throughout the day. You can adjust the model to control the concentration of volume over the time interval. Volume can be pulled forward
for momentum orders or pushed back (for value orders). TWAP will fill an order in its entirety.
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Target Volume or Volume Participation Rate (TVOL): Allows you to participate in the market at the rate specified by the trader. You may modify the participation rate at any time. TVOL will not necessarily fill
an order in its entirety.
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Passive (FADE): This passive strategy minimizes the use of market orders throughout the trading interval. However, you can specify a guaranteed fill of the order at their discretion. In this case, if necessary to complete the order,
the algorithm will revert to using market orders near the end of the trading interval. FADE will fill an order in its entirety if Guaranteed Fill is selected.
- Implementation Shortfall; Arrival Price (SNAP): Measures the stock price at the time of the order, throughout the day, and at the time of execution. Using an Arrival Price (midpoint of Bid/Ask at time of arrival) benchmark, SNAP will determine the best execution tactic while working around the benchmark, given a user-specified target participation rate. SNAP will fill an order in its entirety.
- Target Price (TPRC): TPRC will be more aggressive if the market moves in your favor and less aggressive if it moves against. It incorporates real-time market data to adjust your selected price. TPRC will not necessarily fill an order in its entirety.
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Market on Close (MOC): This model is designed to improve upon the actual closing price. It also allows for trading before the close if it judges that the order will incur material market impact. MOC will fill
an order in its entirety.
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DarkSweepSM: A strategy that will aggregate dark pools of liquidity into a single entry point and abstract the complexities and nuances of the ATS (Alternative Trading Systems) destinations it accesses. Splitting up the
order simultaneously among the available dark venues, it seeks and shifts these shares to optimally source liquidity without affecting the open market. DarkSweep connects to nine ATSs, including Fidelity's own CrossStreamSM ATS. Current destinations include CrossStream, Millennium, Pipeline, and Lava, Lehman LCX, and Liquidnet h30.
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Trailing Stop Orders
Overview
The platform supports trailing stop loss and stop limit orders. This functionality allows you to enter a stop order at a percentage level or dollar level for a long position. The stop price adjusts as the price of the stock fluctuates.
Trailing stop orders can be an effective way to let profits run while limiting your losses.
Trailing Stop Orders:
- Are stop orders that adjust in price with favorable market movement on the security.
- Have the same trading principles and mechanics as stop orders.
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Trigger a buy or sell if and when the stock moves against you by the amount you set in the trail price.
NOTE: The trigger price does not adjust if the price of the security is moving against the investor's position.
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Can be one of four types: Trailing Stop Loss by %, Trailing Stop Loss by $, Trailing Stop Limit by %, and Trailing Stop Limit by $.
NOTE: Trailing Stop Loss triggers a Market order; Trailing Stop Limit triggers a Limit order.
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Cause an alert (Portfolio Class > Trade Support Type > Trailing Stop Orders Subtype) to be generated by the Alert Manager within the platform when the order triggers.
NOTE: Make sure you subscribe to these alerts (Trailing Stop Limit and Trailing Stop Loss) so you can take advantage of this functionality.
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Benefits
The following are some reasons why you may wish to use a trailing stop order:
- Risk Management: Use Trailing Stops when you first buy a stock immediately after a purchase is made by setting a certain dollar or percent cushion in case the stock moves against you.
- Potential Profit Protection: If you make a profit on your trade, you may want to limit your downside and lock in a potential profit.
- Convenience and Ease of Use: Fidelity manages your stop orders for you based on the parameters you set.
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Sell Trailing Stop Order
- Trigger price moves up as the stock moves up and never declines below your original trigger price.
- When the stock price moves sideways or down, the trigger price never retreats from its highest advance.
- If the stock's price moves downward - to or through the trigger price - it automatically triggers an order to sell the stock.
EXAMPLE: The current price of a stock is $50.00. You enter a Sell Trailing Stop order with a trail amount of $4.00, which sets your stop price at $46.00. As the market price of the
stock moves up, your stop price moves up with it, keeping the $4.00 trail. As the market price moves down, the stop price does not move. The market moves to a high of $54.00 (stop price of $50.00). As the market moves down to $50.00, the order triggers.
If you placed a regular stop order, you would not sell until the price hit $46.00 (unless you manually adjusted your stop price). By using a Trailing Stop, you gained an additional $4.00.
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Buy Trailing Stop Order
- Commonly used to buy-to-cover short positions.
- Trigger price moves down as the stock moves down and never advances above your original trigger price.
- Work the same as Sell Trailing Stop orders, but moving in the opposite direction.
- When the stock price moves sideways or up, the trigger price never retreats from its lowest decline.
- If the stock's price moves upward - to or through the trigger price - it automatically triggers an order to buy the stock.
EXAMPLE: The current price of a stock is $45.00. You enter a Buy Trailing Stop order with a trail amount of 10%, which sets your stop price at $50.00 or so. As the market price of
the stock moves down, your stop price moves down with it, keeping the 10% trail. As the market price moves up, the stop price does not move. The market moves to a low that sets your stop price at $46.00. As the market moves up to $46.00, the
order triggers. If you placed a regular stop order, you would not buy until the price hit $50.00 (unless you manually adjusted your stop price). With a Trailing Stop, you saved an additional $4.00.
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Block Order Ticket Field Definitions
| Field |
Definition |
| Action |
Drop-down list used to specify the type of order; selections are:
- Buy
- Sell
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Sell Short: A short sell order action is the sale of a security that is not owned by the seller. The shares are loaned from a broker or another margin account and the proceeds of the sale secure the loan. Short selling allows
investors to take advantage of an anticipated decline in the price of a stock. If the seller buys the stock back at a lower price than the original price, the seller makes a profit. If the seller buys the stock back at a higher price, the seller
incurs a loss.
NOTE: You must have a Margin Agreement on file with Fidelity if you wish to place a sell short order.
- Buy Calls to Open
- Buy Calls to Close
- Sell Calls to Open
- Sell Calls to Close
- Buy Puts to Open
- Buy Puts to Close
- Sell Puts to Open
- Sell Puts to Close
NOTE: No selection (the default).
|
| Algorithm |
NOTE:
- This is an entitled field; there are two algorithmic trading user groups - Premium and Basic.
- Please see the Algorithmic Orders section for additional information.
Based on your algorithmic entitlement, the following selections display in the Algorithm drop-down list on the pop-up screen:
Premium:
- None
- VWAP - Volume Weighted Average Price
- SNAP - Implementation Shortfall: Average Price
- TVOL - Target Volume (Participation Rate)
- FADE - Passive
- TWAP - Time Weighted Average Price
- TPRC - Target Price
- MOC - Market On Close
- DARK - Dark Sweep
Basic:
- None
- VWAP - Volume Weighted Average Price
- SNAP - Implementation Shortfall: Average Price
- TVOL - Target Volume (Participation Rate)
- FADE - Passive
- TWAP - Time Weighted Average Price
- TPRC - Target Price
- MOC - Market On Close
|
| Based On |
NOTE: Only displays if the Price Type is Trailing Stop Loss (% or $) or Trailing Stop Limit (% or $). Designates the price used as the trigger value for a Trailing Stop order; selections are: Last (the default), Bid, and Ask.
NOTE: Making one of these selections provides greater flexibility in setting the trigger value for these orders.
|
| Block Account |
Drop-down list used to make your selection from the available block accounts for order. |
| Dark Sweep Type |
NOTE: This field displays on the Algorithm screen. Used with the Dark Sweep Algorithm only; choices, selected by selecting an associated
radio button, are None, Normal, or Conservative. Dark Sweep attempts to maximize execution without revealing trading intentions and reducing potential market impact.
|
| End Time |
NOTE: This field displays on the Algorithm screen.
Indicates when you would like the order to stop being worked; Represented as YYYYMMDD-HH:MM:SS,
where YYYYMMDD is the current date and you can edit only the HH:MM portion of this time stamp.
Time specified must be between market hours; an error message displays if it is not.
This field is not used by the MOC - Market On Close Algorithm.
|
| Expiration Date |
NOTE: Only displays if the Time In Force is Good Til Canceled.
Optionally used to specify an Expiration Date other than the system
default of 180 days for Equities or the contract's expiration for Options. Either enter the date in the field provided or use the Calendar icon to select one.
NOTE:
If you specify an Expiration Date other than the system default for a Good Til Canceled order:
- If the 180th day is not a business day, the Expiration Date for an Equity order is rounded up to the nearest business day.
- Orders expire at 4:00 P.M. Eastern time on the Expiration Date and their Status changes to Pending Cancel.
- On the day after expiration, the order Status changes to Verified Cancel.
|
| Front Load |
NOTE: This field displays on the Algorithm screen.
Used with the TWAP - Time Weighted Average Price Algorithm only. An up-front,
percentage-based, sales charge in the range of 25-75% of the price of the order that is applied at the initial purchase.
|
| Guaranteed Fill |
NOTE: This field is used on the Algorithm screen.
Disabled for the following Algorithms:
- VWAP - Volume Weighted Average Price
- SNAP - Implementation Shortfall
- TWAP - Time Weighted Average Price
- MOC - Market On Close
- TVOL - Target Volume (Participation Rate)
- TPRC - Target Price
- DARK - Dark Sweep
Displays when choosing Passive as the Algorithm. Indicates whether or not the order must be filled in its entirety; selections are: Y - Yes and N - No (the default).
|
| Limit Price |
NOTE: Only displays if the Price Type is Limit or Stop Limit.
Displays the limit price for the order. |
| Participation Rate |
NOTE: This field displays on the Algorithm screen.
Used with the following algorithms:
- SNAP - Implementation Shortfall
- TVOL - Target Volume (Participation Rate)
- FADE - Passive
- TWAP - Time Weighted Average Price
- TPRC - Target Price
A percentage in the range of 1-50% that represents the target volume participation rate. For example, if the participation rate % is 10, the client wants to be 10% of overall trading volume.
|
| Price Type |
Displays only when adding equity and option orders and determines the execution price for the order; selections are:
- Market: When buying or selling a security, a market order executes at the best price in the current market at the time of your order.
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Limit: A limit order is an order to buy or sell a stock at a specific price or better. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price
or higher.
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Stop Loss: Stop loss orders become market orders once the security trades at the specified stop price. Buy stop loss orders are placed above the current market price, while sell stop loss orders are placed below the current
market price.
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Stop Limit: Stop limit orders become limit orders once the security trades at the specified stop price. Buy stop limit orders are placed above the current market price, while sell stop limit orders are placed below the
current market price.
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Trailing Stop Limit by $ OR Trailing Stop Limit by %: A trailing stop limit order to buy automatically reduces the stop price by the trailing value (dollar
or percentage) when trading moves in your favor. The order triggers a limit order when the stock trades at or above the established stop price. A trailing stop limit order to sell automatically increases the stop price by the trailing
value (dollar or percentage) when trading moves in your favor. The order triggers a limit order when the stock trades at or below the established stop price.
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Trailing Stop Loss by $ OR Trailing Stop Loss by %: A trailing stop loss order to buy automatically reduces the stop price by the trailing value (dollar or
percentage) when trading moves in your favor. The order triggers a market order when the last trade executed is either at or above the established stop price. A trailing stop loss order to sell automatically increases the stop price
by the trailing value (dollar or percentage) when trading moves in your favor. The order triggers a market order when the last trade executed is either above or below the established stop price.
NOTE:
- No selection (the default).
- If you are creating an algorithmic trade, the only available Price Types are Market and Limit.
|
| Quantity |
Indicates the quantity of the order. Based on the order Action, displays either in Shares or in Contracts and must be a whole number greater than 0. |
| Special Conditions |
Displays special order conditions; selections are:
-
All or None: An order instruction specifying to either fill the entire order or do not fill any of it. Making an all-or-none designation restricts the order. The stock can trade at or below your price on a buy, or at or above
on a sell, without the right to execution, unless the entire amount of the order is executable.
- Do Not Reduce (DNR): An order instruction specifying that the order's limit or stop price not be reduced when the company pays a dividend. DNR instructions can only be entered on Good Til Canceled (GTC) orders.
- All or None/Do Not Reduce: An order instruction that combines both of the above conditions, meaning both must be true to place the order.
- Not Held: An order instruction that provides both time and price discretion for Market and Limit orders to attempt to get the best possible price.
NOTE:
- No selection (the default).
- If the Time in Force is Day, the Special Conditions selections are either blank or All or None.
- You cannot specify a Special Condition if you are creating an algorithmic order.
|
| Start Time |
NOTE: This field displays on the Algorithm screen.
Indicates when you would like the order to start being worked; Represented as YYYYMMDD-HH:MM:SS,
where YYYYMMDD is the current date and you can edit only the HH:MM portion of this time stamp.
Time specified must be between market hours; an error message displays if it is not.
This field is not used by the MOC - Market On Close Algorithm.
|
| Stop Price |
NOTE: Only displays if the Price Type is Stop Loss or Stop Limit.
Displays the stop loss/limit price for the order. |
| Symbol/CUSIP |
Indicates the Symbol, CUSIP, or Fund ID of the security for the order. The available entries are filtered according to the Action of the order you are creating. |
| Target Price |
NOTE: This field displays on the Algorithm screen.
Used with the TPRC - Target Price Algorithm only.
Established to indicate the target price for the order.
|
| Time In Force |
Selects for how long the order is valid; selections are:
- Day (the default): An order instruction specifying that the order can be filled at any point during that day.
-
Good Til Canceled: An order instruction placed at a specified price that remains in effect until the order is executed or canceled.
NOTE: Good Til Canceled orders for Equities expire 180 calendar days from the date they are placed. Expirations occur before the market opens on the designated expiration date. When the expiration date falls on a holiday or a weekend, the last day to extend the date is the business day before the expiration date.
-
Immediate or Cancel: An order instruction specifying that any part of the order be filled immediately and any remaining portion be canceled. A customer enters an Immediate or Cancel order at the current bid
or ask when the bid or ask size shows fewer available shares than the customer wants to trade, but the customer is willing to accept as many shares as are currently available.
-
Fill or Kill: An order instruction specifying that the order be filled in its entirety or canceled immediately. The order cannot be partially executed. A customer enters a Fill or Kill order at the current
bid or ask when the bid or ask size shows fewer available shares than the customer wants to trade and the customer will not accept less than the desired number of shares.
NOTE:
- No selection (the default).
- If the Action is Sell Short, the Time in Force is Day and cannot be changed.
|
| Trail Amount |
Indicates the amount that a trailing stop order "trails" the current market; may be either a percentage or a dollar amount, based on the selection made in the Price Type field.
Displays for Price Types of Trailing Stop Loss by %, Trailing Stop Loss by $, Trailing Stop Limit by %, or Trailing Stop Limit by $.
Does not display for Price Types of Market,
Limit, Stop Loss, and Stop Limit.
NOTE: Does not apply to Algorithmic orders.
|
| Urgency |
NOTE:
- This field displays on the Algorithm screen for SNAP, TWAP, and MOC algorithmic strategies.
- No selection (the default).
- If you do not specify the field when sending the order, Fidelity Capital Markets defaults the Urgency value to Neutral.
Selections are:
|
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NOTE: See the following related topics for additional information on trading:
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