Types of orders used when trading commodities

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	Order Types Order types by Exchange - Different exchanges accept different order types. All order types are not accepted by all exchanges. The bottom of this document lists order types by exchange. This list is subject to change without notice. The types of orders most commonly used are briefly described below: MARKET ORDER: The market order is the most frequently used order. In most instances it assures you of getting a position and eliminates "chasing" a market to get in or out of a position. The market order is executed at the best possible price obtainable at the time the order reaches the trading pit. LIMIT ORDER: The limit order is an order to buy or sell at a designated price. Limit Orders to buy are placed below the market while limit orders to sell are placed above the market. Since the market may never get high enough or low enough to trigger a limit order, a customer may miss the market if he uses a limit order. Even though you may see the market touch your limit price several times, this does not guarantee or earn you a fill at that price. MARKET IF TOUCHED (MIT): MIT’s are the opposite of stop orders. Buy MIT’s are placed below the market and Sell MIT’s are placed above the market. An MIT order is usually used to enter the market or initiate a trade. An MIT order is similar to a limit order in that a specific price is placed on the order. However, an MIT order becomes a market order once the limit price is touched or passed through. An execution may be at, above, or below the originally specified price. An MIT order will not be executed if the market fails to touch the MIT specified price. STOP ORDER: Stop orders can be used for three purposes: a. to minimize a loss on a long or short position b. to protect a profit on an existing long or short position, or c. to initiate a new long or short position A buy stop order is placed above the market and a sell stop is placed below the market. Once the stop price is touched, the order is treated like a market order and will be filled at the best possible price. While stops and MIT’s are normally elected when the opening of a market is such that the price is through the stop or MIT limit. In this case, you can routinely expect the fill to be much worse than the original stop or better on the MIT. This applies to stop orders and MIT orders placed before the opening of trading. position. STOP LIMIT ORDERS: A stop limit order lists two prices and is an attempt to gain more control over the price at which your stop is filled. The first part of the order is written like the above stop order. The second part of the order specifies a limit price. This indicates that once your stop is triggered, you do not wish to be filled beyond the limit price. Care should be taken when considering stop limit orders especially when trying to exit a position because of the possibility of not being filled even though the stop portion of the order is elected. There is no Stop Limit order without a second price. If your order can not be filled by the floor broker immediately at the Stop price, it becomes a straight limit order at the stop price. STOP CLOSE ONLY: The stop price on a stop close only will only be triggered if the market touches or exceeds the stop during the period of time the exchange has designated as the close of trading (usually the last few seconds or minutes). MARKET ON OPENING: This is an order that you wish to be executed during the opening range of trading at the best possible price obtainable within the opening range. Not all exchanges recognize this type of order. One exchange which does not is the Chicago Board of Trade. MARKET ON CLOSE (MOC): This is an order that will be filled during the period designated by the exchange as the close at whatever price is available. A floor broker reserves the right to refuse an MOC order up to fifteen (15) minutes before the close depending upon market conditions. FILL OR KILL: The fill or kill order is used by customer wishing an immediate fill, but at a specified price. The floor broker will bid or offer the order three times and return to you with either a fill or an unable, but it will not continue to work throughout the session. ONE CANCELS THE OTHER (OCO): This is a combination of two orders written on one order ticket. This instructs our floor personnel that once one side of the order is filled, the remaining side of the order should be canceled. By placing both instructions on one order, rather than two separate orders, you eliminate the possibility of a double fill. (This order is not acceptable on all exchanges.) We will not routinely accept cancel / replace of an OCO order within fifteen (15) minutes of the close of trading. We will accept canceling both sides during this period and replacing with either MOC or market orders, but can not guarantee against a double fill. In addition, an existing order may not be cancel / replaced to an OCO; the original order must be canceled and a new order entered. To prevent potential double fills, please ask to be confirmed out before the OCO is placed. SPREAD: The customer wishes to take a simultaneous long and short position in an attempt to profit via the price differential or "spread" between two prices. A spread can be established between different months of the same commodity, between related commodities or between the same or related commodities traded on two different exchanges. a spread order can be entered at the market or you can designate that you wish to be filled when the difference between the commodities reaches a certain point (or premium). For example: "BUY 1 JUNE LIVE CATTLE, SELL 1 AUGUST LIVE CATTLE PLUS 100 TO THE AUGUST SELL SIDE." This means that you want to initiate or liquidate the spread when August Cattle is 100 points higher than June cattle. At this time, most exchanges do not report spread transactions. A spread broker has great leeway to ensure he can obtain prices required by limits. In most cases, he can not be held to any price differentials which seem to appear on quotation equipment. OPEN ORDERS: These orders are also known as Good Till Canceled Orders and will remain valid during the session that the order was entered until canceled by the customer. DISCRETION ORDERS (DRT): On most orders, it is possible to give the floor broker some discretion to fill the order as he sees fit. This leeway can be very broad or it can be narrowly defined. Please remember that it is always in the broker’s best interest to fill an order at the best available price. OTHER: As futures and options trading becomes more and more sophisticated, new strategies and techniques may arise. Certain option orders called "spreads" may not look much like traditional spreads. There may be two buys and no sells, the quantity may be a ratio, it may include futures and options on the same order, and many more. If you have any questions about an order, please ask your broker and they will be happy to assist you. Different exchanges accept different orders. All of the orders which we have discussed are not accepted by all exchanges. Following is a list of the principle commodity exchanges, their commodities and the orders which they accept. This list is subject to change without notice. CHICAGO BOARD OF TRADE (Acceptable are: Market, Market on Close, Limit, Stop, and Fill or Kill Orders) WHEAT, CORN, OATS, SOYBEANS, SOYBEAN OIL, SOYBEAN MEAL, ANHYDROUS AMMONIA, DAP, T-BONDS, T-NOTES, MUNI BONDS, FIVE YEAR NOTES, TWO YEAR NOTES, KILO GOLD, 1000 OZ. SILVER. CHICAGO MERCANTILE EXCHANGE (All of the orders described in this section are acceptable.) LIVE CATTLE, FEEDER CATTLE, LIVE HOGS, PORK BELLIES, LUMBER. INDEX AND OPTIONS MARKET (IOM) (All of the orders described in this section are acceptable.) S&P 500, MID CAP 400, NIKKEI 225. INTERNATIONAL MONETARY MARKET (IMM) (All of the orders described in this section are acceptable.) T-BILLS, JAPANESE YEN, EURODOLLARS, BRITISH POUND, CANADIAN DOLLAR, SWISS FRANC, DEUTSCHE MARK, AUSTRALIAN DOLLAR. NEW YORK COMEX (For Copper, Gold, and Silver, Acceptable are: Market, Market on Close, Limit, Stop, and Fill or Kill.) NY COTTON EXCHANGE (Acceptable are: Market, Market on Close, Limit, Stop and Fill or Kill.) COTTON, ORANGE JUICE, DOLLAR INDEX. NY COFFEE, SUGAR & COCOA EXCHANGE (All of the orders described in this section are acceptable except OCO orders.) COFFEE, SUGAR, COCOA. NY MERCANTILE EXCHANGE (All of the orders described in this section are acceptable except OCO orders.) UNLEADED GAS, HEATING OIL, PLATINUM, CRUDE OIL, PALLADIUM, NATURAL GAS. NY FUTURES EXCHANGE (All of the orders described in this section are acceptable. OCO orders are only acceptable when the 2nd half of the order is MOC.) NYFE INDEX, CRB INDEX. KANSAS CITY BOARD OF TRADE (All of the orders described in this section are acceptable except OCO orders.) KC VALUE LINE, KC MINI VALUE LINE. (Acceptable are: Market, Market on Close, Limit, Stop, and Fill or Kill.) KANSAS CITY WHEAT. MINNEAPOLIS BOARD OF TRADE (All of the orders described in this section are acceptable except OCO orders.) MINNEAPOLIS WHEAT, MINNEAPOLIS WHITE WHEAT. MID AMERICA EXCHANGE (Acceptable are: Market, Market on Close, Limit, Stop, Fill or Kill, and Stop Close Only orders.) CATTLE, HOGS, SILVER, GOLD, CORN, SOYBEANS, SOY MEAL, OATS, WHEAT, RICE, EURODOLLAR, T-BONDS, SWISS FRANC, CANADIAN DOLLAR, DEUTSCHE MARK, JAPANESE YEN, BRITISH POUND. OTHER New contracts are constantly being introduced at the various exchanges and as foreign market places become more accessible, new exchanges and their contracts are also being added. For specific information regarding the contracts and types of orders accepted, please contact your broker. Please note that any individual exchange may change the orders which it will accept without prior notice, and even a particular executing broker at a given exchange may refuse to accept certain types of orders at their sole discretion. There is risk of loss in trading commodities.

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