Legal Definitions - sell order

A sell order is an instruction given by an investor or entity to a broker or financial institution to dispose of a specific quantity of a particular security (such as stocks, bonds, or mutual funds) from their portfolio. This instruction typically includes details like the type of security, the number of units to be sold, and often specific price conditions (e.g., selling immediately at the current market price, or only if the price reaches a certain level).

• Example 1: Individual Investor Selling Shares

  Maria owns 250 shares of "Green Energy Solutions Inc." stock. After reviewing her investment portfolio, she decides to reduce her exposure to the energy sector. She logs into her online brokerage account and places an instruction to sell all 250 shares of Green Energy Solutions Inc. at the prevailing market price.

  This instruction to her broker is a sell order. It directs the broker to execute the sale of her specified shares, converting her stock holdings into cash.

• Example 2: Institutional Fund Manager Rebalancing

  The portfolio manager for "Global Diversified Fund," a large investment fund, determines that the fund's allocation to technology stocks has become too high relative to its target strategy. To rebalance, the manager instructs the fund's trading desk to sell 75,000 shares of "FutureTech Innovations Corp." over the course of the trading day to minimize market impact.

  This directive from the portfolio manager to the trading desk constitutes a sell order, initiating the divestment of a portion of the fund's FutureTech Innovations Corp. shares to align with the fund's investment strategy.

• Example 3: Company Divesting Assets

  "Acme Holdings Corp.," a diversified conglomerate, decides to streamline its operations by divesting its stake in a non-core subsidiary, "Logistics Solutions Ltd." Acme Holdings owns 10 million shares of Logistics Solutions Ltd. and instructs its investment bank to find buyers and execute the sale of these shares.

  This instruction to the investment bank to offload the company's shares in Logistics Solutions Ltd. is a sell order, aimed at converting the subsidiary's equity into cash for Acme Holdings Corp.