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contingent order

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Financial Dictionary

Contingent Order

1. An order involving the simultaneous execution of two or more transactions.

2. An order whose execution depends upon the execution and/or price of another security.

Investopedia Commentary

These types of orders are generally placed for option strategies where two separate transactions must occur at the same time. An example is a buy-write, where an investor would buy a stock and sell a call simultaneously.

See also: Buy Write, Leg, Spread, Strangle

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Financial Dictionary

contingent order

A special type of security order that instructs the broker to take some action only in the event that something else has occurred. An example would be an order to sell call options on Westinghouse common stock only after shares of Westinghouse have been purchased at a specified limit price.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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