A working order is a general term for either a stop order or a limit order to open.Stop and limit orders are together known as working, or pending orders.Essentially, they’re instructions for a broker to execute a trade when a specific price is reached.

Examples of working order in trading

When placing a working order, you’re choosing a future price at which to buy or sell an asset. Stop orders will execute at a level less favorable than the current market price, while limit orders will execute at a level more favorable than the current market price.

In other words, you don’t open the trade at the current price of an asset, but rather place an order to open the trade at the price that you are willing to pay. Only once – or if – that price is reached, will your trade be opened.

Say you want to go long on Coca-Cola shares. The current share price is $44 but you expect that the market price is going to dip and you want to buy at a more advantageous price before it starts rising again. You decide to attach a working order that will open your trade if the share price reaches $43. If the market does fall to this price, your order would be executed, but if the market didn’t reach this price, the working order would not be executed.