Stock Order

Financial Dictionary -> Investing -> Stock Order

Businesses that have an inventory and sell products usually have what is called stock. Stock are units of the product they sell that is stored for when the store's shelves need refilling or when somebody places an order, or in a similar scenario. It is basically there to speed the process along, instead of using production methods like 'made to order' or 'just in time', both of which do not hold any stock, using a stock order method the units are ready and waiting. The amount of stock held depends on storage costs, demand for the product and production output; it can be very costly to hold stock.

A stock order simply means the ordering of new stock to refill the inventory, replenish shelves or when a large order has been made etc. The warehouse will be contacted and the delivery will be made.

Supermarkets are at the forefront of stock order technology, in that the whole process is completely computerized. As products go through and are scanned at the checkouts, the inventory is depilated from an electronic database. When an item reaches a certain low lever a new order is automatically made and will be delivered during the next day's cycle. This keeps shelves full and prevents over or under ordering.

Stock Order is also a term used in investing circles, to simply refer to the ordering of stock. It is a word that has grown with the internet and the many online stock brokers. It is the collective word for terms like Market Order, Limit Order, Stop Loss Order, Trailing Stops Orders, Good Till Canceled Order, Day Order and All or None Order.

Each one of these orders has their own terms and methods of buying stock; for example on a Day Order if the broker doesn't purchase the stock within the day for their client then it is canceled.