Glossary · 13 terms
Trading & Execution
All trading & execution terms in the EquitiesAmerica.com glossary — plain-English definitions for American investors.
All or None(AON)
An all-or-none (AON) order instructs a broker to execute an order only if the entire quantity can be filled; unlike a fill or kill order, it does not require immediate execution and may remain active until cancelled.
Best Execution
Best execution is the regulatory obligation requiring broker-dealers to seek the most favorable terms reasonably available when executing customer orders, considering factors such as price, speed, likelihood of execution, and order size.
Dark Pool(alternative trading system)
A dark pool is a private electronic trading venue where institutional investors can buy and sell large blocks of securities away from public exchanges, with order information withheld from the broader market until after execution.
Day Order(day limit order)
A day order is a buy or sell instruction that expires automatically at the end of the regular trading session on the day it is entered, if it has not been executed by that time.
Fill or Kill(FOK)
A fill or kill (FOK) order requires that the entire order be executed immediately and in full; if the order cannot be completely filled at once, it is cancelled outright with no partial execution permitted.
Good-Till-Cancelled Order(GTC order)
A good-till-cancelled (GTC) order is a buy or sell instruction that remains active until it is either executed or explicitly cancelled by the investor, as opposed to expiring at the end of the trading day.
Margin Account(margin brokerage account)
A margin account is a brokerage account in which the broker lends the investor a portion of the purchase price of securities, allowing the investor to buy more than they could with their own capital alone, using the securities in the account as collateral.
Margin Call
A margin call is a demand from a broker that an investor deposit additional funds or securities into a margin account to bring the account's equity back above the required maintenance margin level after market losses have reduced it below the minimum threshold.
Payment for Order Flow(PFOF)
Payment for order flow (PFOF) is the practice by which a retail broker receives compensation from a market maker or trading firm in exchange for routing the broker's customer orders to that firm for execution.
Regulation NMS(Reg NMS)
Regulation NMS (National Market System) is a set of SEC rules adopted in 2005 that governs how U.S. equity markets are structured, requiring trade-throughs to be prevented and establishing a framework for fair access to market data and order execution across exchanges.
Short Selling(shorting)
Short selling is an investment strategy in which an investor borrows shares of a security and sells them with the expectation of repurchasing them later at a lower price, profiting from the difference if the price declines.
Stop-Loss Order(stop order)
A stop-loss order is an instruction placed with a broker to sell a security automatically once its price falls to a specified level, limiting the investor's potential loss on the position.
Trailing Stop(trailing stop-loss)
A trailing stop is a dynamic stop-loss order that moves in lockstep with a rising security price by a fixed dollar amount or percentage, locking in gains while still protecting against significant reversals.