Securities order
A security order ( securities order ) is the banking of the order to buy or sell a specific type and amount of securities .
General
The compound word contains the order ( French ordre , order), which stood for order in the old German stock exchange language . Even today, terms have as order book , order book statistics, or order additional survived. In the securities business, bank customers must give their credit institution an informal order to buy or sell securities (buy order or sell order) so that banks can take action. A security order is always based on a buy or sell decision by the client . There are also forms in paper form or online for electronic banking . Any Internet user can place an order if they are admitted to online banking with a broker account . As an exception, orders by telephone are also possible. All order forms must contain the order-relevant data that the banks need to process the securities orders.
content
A security order initially includes the type of transaction (purchase / sale) and the type of security ( shares , bonds , investment certificates , options ) and its security identification number / ISIN , any price / price limit (limit order ) and certain additions to the order . In addition, the order validity and the stock exchange are important. If the price is not quoted on a domestic stock exchange due to special circumstances in the area of the issuer ( suspension of trading ), all securities orders to be executed at this execution venue for the securities in question expire.
procedure
The securities order to be signed by the bank customer is first checked internally for its plausibility. In the case of buy orders, a check is also made in the pre-disposition to determine whether the bank account has sufficient bank balances or free credit lines ( securities lombard loan ) for debiting the purchase price ; for sell orders, there must be a corresponding balance in the securities account . The orders are then forwarded to the trading system of the relevant stock exchange, where they are entered in the corresponding electronic order book of the responsible lead broker .
Execution types
An order can have different types of execution:
- Market order ( English best price order ): The order is executed at the price valid on the exchange at the time the order is entered.
- Limit order : The order is executed at a given price or better. If the specified price is not reached during the term of the order (on most stock exchanges a maximum of 90 days), the order will be deleted. As a rule, a shorter term is specified for the order.
- As a pegged order dynamic programmed purchase orders are designated whose bid price is automatically in a predetermined distance to the corresponding underlying moved. There are the following order types:
- Pegged to Market (order price is based on the current best market price)
- Pegged to Primary (order price is always better than the current best market price at a specified interval)
- Pegged to Stock (order price of an option is based on the current market price of the underlying share)
If an order is not in line with the market due to an error, it is called a mistrade .
Legal issues
In the terms and conditions , credit institutions refer to the security order as an order. For securities orders, the order law of §§ 662 ff. BGB applies , according to which the commissioned institute undertakes, by accepting an order, to procure a transaction assigned to it by the client . A bank may deviate from the instructions of the client within the framework of § 665 BGB, but must inform him beforehand. Until the order has been executed, the order can be revoked by any of the parties in accordance with Section 671 (1) BGB . The institute will inform the customer immediately about the execution of the order. If the order is not initially executed (for example because the price limit has not been reached), the customer receives an order confirmation and , if the order is executed, a securities purchase or sale statement .
According to Sec. 69 WpHG , the securities order is a customer order under securities law . This regulation requires that investment services companies
- must take suitable precautions in order to execute customer orders immediately and honestly in relation to other customer orders and the trading interests ( proprietary trading ) of the investment services enterprise or to forward them to third parties,
- to execute comparable customer orders in the order in which they are received ,
- ensure that client funds and financial instruments are booked correctly,
- to ensure that information in connection with not yet executed customer orders is not misused and to inform every customer concerned about the merging of orders and the associated risks and every private customer concerned about any significant problems known to them in the execution of the order.
This provision is intended on the one hand to prevent conflicts of interest, for example in connection with proprietary trading, and on the other hand to prevent manipulation and abuse to which securities orders could be exposed.
Are financial products via investment advice for banks and financial services institutions bought or sold or issued a hold recommendation, according to § 64 para. 4 WpHG the private investor a written suitability declaration before to make delivery of the securities order available that all the risks discussed and attests to the investor that his risk setting for this is the correct risk class has.
Web links
Individual evidence
- ^ Matthias von Arnim, Successful with Shares , 2007, p. 122
- ↑ Order types ( Memento of the original from April 22, 2008 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
