Not-held order

With a not-held order, the customer decides the essentials — which security, whether to buy or sell, and how many shares — but hands the broker time and price discretion. The broker uses professional judgment about when and at what price to execute, rather than filling the order immediately at the current market.

The name comes from the fact that the firm is "not held" to the market price quoted when the order arrived. If the broker waits for a better price and the market moves the wrong way instead, the customer can't hold the firm responsible for the miss. This flexibility is most useful for large orders, where dumping the entire size on the market at once could move the price against the customer — the broker can instead work the order in pieces throughout the day.

An important regulatory nuance: because the customer still chooses the asset, the action, and the amount, time and price discretion alone does not make this a discretionary order requiring written trading authorization. However, that verbal discretion is only good for the trading day it's given — carrying it beyond one day requires the customer's written instruction.

The Series 7 exam tests not-held orders among its order specification types — know what discretion the customer grants, why large orders use them, and the one-day limit on oral time and price discretion.