What is a Cancel Former Order?

Cancel former order is a specific type of trade order a client places with a broker in order to cancel an unfilled buy or sell order.

How Does a Cancel Former Order Work?

For example, if a client has an outstanding order to buy 100 shares of Company XYZ at $15 per share and decides he wants to buy the shares at the current market price of $17 per share, he must submit a cancel former order for the pending instructions and replace it with a new order to buy at the market price.

Why Does a Cancel Former Order Matter?

A cancel former order (CFO) is generally used for cancelling a limit order (the order is transacted only once the security reaches a specific price level) when the investor decides the current market price is more advantageous than the limit. CFOs also ensure that orders are not placed more than once, should a client change his mind and wish to alter a current order

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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