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Frequently Used Terms When Investing in Stocks

Bid
This represents the highest price a prospective buyer is willing to pay for a security.

Offer (Ask)
This represents the lowest price a prospective seller is willing to accept for a security.

Market Order
An order to buy or sell a specified number of shares at the best available price at the time the order is received on the exchange floor. All orders not bearing a specific price are usually considered "at the market" which could mean paying the "offer" when buying or accepting the "bid" when selling.

Limit Order
An order for which you request a specific price that the transaction may be executed.

Open Order
An order which you request we keep on our records until executed or cancelled. Under Action Direct policy, open orders are valid for up to a maximum of 30 calendar days.

All or None Order
An order which has certain restrictions placed upon it before it can be executed. The total number of shares specified on the order must be executed or else none will be bought or sold. These orders do not participate in the regular market and are executed on a best-efforts basis only.

Any Part Order
An any part order is the opposite of an all or none order. It means you are willing to accept any part including odd, broken or board lots up to the full amount of your request. Under Action Direct policy, full commissions and fees apply for each partial order executed, except when filled the same business day.

Stop Buy and Stop Loss Orders
Orders to buy or sell that are placed above or below the current market price, which become active orders when the price of a board lot rises or falls to the specified price. These orders may be placed to execute at the market, at a specified limit or within a specified price range.

A stop buy order can be used to protect against losses in a short sale, whereas a stop loss order can be used to protect a paper profit or to limit a possible loss when you already own the shares. Not all stock exchanges will accept these orders. Stop buy and stop loss orders are risky because they may not necessarily fill at the specified price but at the best possible price available at that time.

Day Order
An order to buy or sell securities which expires at market close on the day it is taken. All orders are considered day orders unless you specify otherwise.

Change Former Order (CFO)
An order which changes the price or number of shares of an outstanding order.

Cancel
An order which completely cancels a previously entered order.

Board Lot
Share price under $0.10 - 1,000 shares Share price $0.10 to $0.99 - 500 shares Share price $1.00 and up - 100 shares