What Is Closing Offset (CO) Order?

A closing offset (CO) order is a type of limit order that a trader can place during the trading day for execution at market close for that day. The trade CO price will always beဣ that day’sꦫ closing price.

Understanding Closing Offset (CO) Order

The closing offset order is a trade type first made available by the New York Stock Exchange (NYSE) in 2009 as a means to offset daily 澳洲幸运5官方开奖结果体彩网:order imbalances at market close. The CO order is a 澳洲幸运5官方开奖结果体彩网:day limit order. The trader specifies a price floor for sales or a ceiling for buys, and if the closing price does not satisfy that limit price the order is closed without execution. Execution can only take place at the 4:00 market close and at that day’s closing price. Traders can cancel a CO order for any reason up to 3:45. After 3:45, an order can only be canceled due to an error. After 3:58, CO orders may not be withdrawn.

A CO order is a particular type of 澳洲幸运5官方开奖结果体彩网:limit-on-close (LOC) order and may be contrasted with limit-on-open orders orꦍ market-on-close (or open)🎃 orders which do not specify a price.

At market close, the NYSE follows a prioritized protocol to fill open orders. CO orders yield to all other open orders. Within that day’s CO interest, orders are prioritized according to the time at which they were placed. Any CO order that does not satisfy the day’s imbalance will not be filled. These rules are identical to those governing 澳洲幸运5官方开奖结果体彩网:market on close (MOC) and 澳洲幸运5官方开奖结果体彩网:limit on close (LOC) orders. CO orders, however, must be placed in round lots. CO orders are of particular use to managers of mu🌳tual funds designed to track daily closing index values.

CO Orders and the Closing Auction

Like MOC and LOC orders, CO orders can only be filled at market close. This is the culmination of a process known as the closing auction, which is particularly important to traders as a day’s 澳洲幸运5官方开奖结果体彩网:closing price is the most 🧜widely-published share price and is the key data point driving opening trading on the following mor𒆙ning.

At 3:45 on every trading day, the NYSE electronically publishes a rundown of open interest on each stock. NYSE rules prohibit traders from adjusting their existing CO orders once this information has been distributed, except in case of legitimate error. The exchange updates closing auction data every five seconds until closing. New CO, MOC, and LOC orders will factor into those updates and can flip the imbalance during the final minutes prior to the closing auction. Key data points in the closing bulletin include imbalance side and quantity, expected 澳洲幸运5官方开奖结果体彩网:indicative match price, and⛄ expected paired trade volume at the match price.