What Is a Limit-on-Open (LOO) Order?

A limit-on-open (LOO) order is a type of limit order to buy or sell shares at the market open if the 澳洲幸运5官方开奖结果体彩网:market price meets the limit's condition. 𒀰This type of order is good only for the market opening and does not last for the whole trading𝕴 day.

A LOO order can be compared with a 澳洲幸运5官方开奖结果体彩网:limit-on-close (LOC) order and contrasted with a 澳洲幸运5官方开奖结果体彩网:market-on-open (MOO) order, which is a non-limit market order that is executed 🥀at or just after the opening of a stock exchange.

Understanding a Limit-on-Open (LOO) Order

LOO orders are one of several 澳洲幸运5官方开奖结果体彩网:conditional orders available to investors. They are closely comparable to LOC orders since both are executed at the op🐼en or the close.

Investors and traders use conditꦗional orders to specify prices at which they are willing to buy and sell. Limit orders provide a way for investors to set specific investing parameters and also to manage risk. Active traders can also use limit orders ꦬto make multiple bets at various different price points in an active trading strategy.

Limit-on-Open Order Execution

A LOO order is a conditional limit order that investors can use when seeking to bet on a security’s price at the open of trading. A LOO order can be used to buy or sell a security. It is entered as a standard limit order, but it also has a specified condition for the timing of the order. As the name suggests, LOO orders are conditioned for 澳洲幸运5官方开奖结果体彩网:execution only at the market’s open.

LOO and LOC orders are unique in that they offer execution at a specified time during the trading day; the open or the close of trading. A LOO order allows an investor to place a bet on the next trading day’s 澳洲幸运5官方开奖结果体彩网:opening price. Generally LOO orders mu🐲st be submitted prior to 09:28 a.m. Eastern ti🦂me, two minutes before the market opens. If a LOO order is not executed at the market’s open, it is canceled.

These orders are generally used by traders who believe that the market’s open will offer the best timing and 澳洲幸运5官方开奖结果体彩网:liquidity for their particular trade.

Example of a Limit-on-Open Order

As an example, consider a trader who holds 1,000 shares in ABC stock and wants to sell at the marke𓃲t open but also wants to guarantee that they will receive at least $50 per share. The trader, therefore, uses a LOO order to sell the shares at a limit of $50.

If at open the shares trade at or above $50, the order will be executed. Conversely, if they trade below $50,🥀 the order will not be filled and then will be canceled.

Limit-on-Open (LOO) Order vs. Li𝓡mit-on-Close (LOC) Order

A LOC order works in the same way but at the close of trading. An investor can place a LOC order with a specified price for execution at th✱e mark🐲et’s close.

A trader placing this type of order believes that the market’s close will offer the most favorable time and liquidity for their trade. Both a LOO and a LOC order allow the trader to ꩲcontrol the exact timing of execution.