Compound orders
Compound orders are those that assume a certain logical chain in their execution. That’s why they are also referred to as conditional orders. Strictly speaking, such an order is not a single order: it’s a sequence of orders that are triggered one by another.
As the most common example, let’s consider a stop-limit order. Unlike stop or limit orders, it requires two prices to be specified: stop and limit. If such an order is sent to the execution venue, first, the venue’s matching engine waits till the stop price of the order is touched by the market (best bid/ask) price. After that, the order is executed using its limit price exactly like when executing a limit order. So, a stop limit order is a combination of both.
For example, if the current price of EUR USD is 1.01015 and I want to buy it at 1.0102, I can use a stop order to enter the market – but I remember that during the execution of a stop order, I can get a potentially...
