What Does ‘Filled’ Mean in Trading?

In trading terminology, the term ‘filled’ refers to the status when an order placed by a trader has been completed. For instance, if a trader submits an order to a broker to buy 100 lots of gold at a price of 1728.50, this order will be classified as filled only when the broker has successfully obtained all 100 lots requested by the trader. This completion of the order signifies that the trader’s instructions have been fully executed.

How Long Does It Take for an Order to Be Filled?

The time it takes for an order to be filled can vary greatly, ranging from less than a second to the entirety of a market session. This depends on several factors, including the type of order placed. Some orders are executed almost instantaneously, while others may take more time based on market conditions and the specifics of the trade.

What Are the Common Types of Orders in Trading?

There are several types of orders that traders commonly use to carry out transactions. The choice of order type depends on the trader’s strategy and desired outcome. Here are some of the most common types:

Buy Stop Orders

A buy stop order is placed to buy a security at a price above the current market price. This type of order is typically used to limit a loss or to protect a profit on a security that has been sold short.

Market Orders

A market order is an order to buy or sell a security immediately at the best available current price. Market orders are executed quickly, but the final price may be different from the last traded price due to market fluctuations.

Stop-Loss Orders

A stop-loss order is placed to sell a security when it reaches a certain price, helping to limit potential losses. This order becomes a market order once the stop price is hit.

Limit Orders

A limit order is an order to buy or sell a security at a specified price or better. This type of order ensures that a trader does not pay more or receive less than the desired price, but it may not be filled if the market does not reach the specified price.

What Criteria Must Be Met for an Order to Be Filled?

Not all orders are guaranteed to be filled. Several criteria must be met for an order to be successfully executed. These include:

Expiration

The financial instrument involved in the trade must be open to trading. If the market is closed, the order cannot be filled.

Volume

There must be sufficient volume available in the market to complete the trade. If the volume is insufficient, the order may only be partially filled or not filled at all.

Trading

The financial instruments must be actively trading. If trading is halted or suspended, the order will not be filled.

Targeted Price

For limit orders, the targeted price must be reached for the order to be executed. This applies to both buying and selling perspectives. If the price does not reach the specified target, the order remains unfilled.

What Happens If These Criteria Are Not Met?

If any of the above criteria are not met, the order will not be filled. Additionally, slow execution times can lead to price fluctuations between the time an order is placed and the time it is fulfilled. This discrepancy is referred to as order spillage, and it can result in the trade being filled at a different price than initially requested.

Key Takeaways

Understanding the concept of a filled order is crucial for anyone looking to get into trading. Here are some key points to remember:

• A filled order status means that the order has been completed, whether it is from a buying or selling perspective.
• Filled orders can take from less than a second to the end of a market day to be completed.
• The type of order used for a transaction depends on the trader’s desired outcome.
• Orders must meet specific criteria—expiration, volume, trading, and targeted price—to be filled.

By understanding these fundamentals, you can make more informed decisions and better navigate the complexities of trading. Happy trading!