Booked orders are orders that do not get traded when ordered. These orders are also known as outstanding orders and remain in the system until they are matched with a buyer or a seller. Investors use them to quote a desired price they wish to purchase or sell and ensure they obtain their desired price rather than the prevailing market price.
How Booked Orders Work
When an investor places a booked order, it remains open until it gets executed or cancelled. While other market orders are processed right when the order is placed and are bought at the current price, the booked orders wait until the price reaches the level desired by the investor. This helps traders plan their investments better and also avoids the effects of any sudden price changes.
Benefits of Booked Orders
Following are some of the important advantages of utilising booked orders:
- Improved Control: Investors may specify their desired buying or selling price, so they do not need to accept an unfavourable rate from the market.
- Lower Risk: The investor can avert losses triggered by unforeseen market fluctuations if he/she pays a fixed rate.
- Convenience: As placed orders remain in the system, traders do not need to watch prices constantly.
- Flexibility: The investor can change or terminate the order when the market moves unfavourably.
Conclusion
Booked orders are also known as outstanding orders. They give investors better control of their trades by allowing them to choose a specific price they want to buy the stock instead of the current price. These orders help reduce risks and offer flexibility in trading. To gain control over investments, investors should use booking orders.