Simple English definitions for legal terms
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Definition: A type of order to buy or sell a security at different price ranges.
Example: An investor wants to buy 100 shares of XYZ stock, but they don't want to buy all the shares at once. They place a scale order to buy 20 shares at $50, 30 shares at $55, and 50 shares at $60. This means that if the stock price reaches $50, they will buy 20 shares, and if it reaches $55, they will buy 30 more shares, and so on.
Explanation: A scale order allows investors to buy or sell a security at different price levels, which can help them manage their risk and potentially get a better price. In the example, the investor is buying shares at different price points, which can help them average out the cost of the investment. Scale orders can be useful for investors who want to take a more strategic approach to buying or selling securities.