What is an Off-Floor Order?
How Does an Off-Floor Order Work?
An off-floor order is what many consider a typical order transaction. For example, let's say John wants to sell 100 shares of Company XYZ, which is listed on the New York Stock Exchange (NYSE). He calls his broker and tells her to sell the shares. Because John's broker does not physically work on the trading floor of the NYSE, the order is considered an off-floor order.
Often, the specialists who work on the floor of the NYSE will buy and sell shares for their own accounts. These orders are called on-floor orders, because both parties to the transaction are present on the actual trading floor.
Why Does an Off-Floor Order Matter?
Trading rules require exchanges to execute off-floor orders ahead of on-floor orders. This is because on-floor orders typically involve specialists trading for their own house accounts rather than for customers. Though on-floor orders are perfectly legal and are in fact very important in providing liquidity and rapid execution to the markets, the primary role of a specialist and most other trading floor personnel is to facilitate customer trades, and they therefore must put those interests ahead of their own.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.