Guaranteed Order
A guaranteed order is a type of financial transaction in which a buyer agrees to purchase a certain amount of a security from a seller at a predetermined price. The buyer is obligated to purchase the security regardless of market conditions, and the seller is obligated to provide the security at the agreed-upon price. Guaranteed orders are typically used in the stock market, but they can also be used in other types of financial markets, such as the bond market.
History of Guaranteed Orders
The concept of a guaranteed order has been around since the early days of the stock market. In the early days of the stock market, traders would often enter into agreements with each other to purchase or sell a certain amount of a security at a predetermined price. These agreements were known as “guaranteed orders” because the buyer was obligated to purchase the security regardless of market conditions, and the seller was obligated to provide the security at the agreed-upon price.
Today, guaranteed orders are still used in the stock market, but they are also used in other types of financial markets, such as the bond market. In the bond market, a guaranteed order is known as a “bond purchase agreement” and is used to ensure that the buyer will purchase a certain amount of a bond at a predetermined price.
Comparison Table
| Type of Transaction | Obligation of Buyer | Obligation of Seller |
|---|---|---|
| Guaranteed Order | Purchase security at predetermined price | Provide security at predetermined price |
| Bond Purchase Agreement | Purchase bond at predetermined price | Provide bond at predetermined price |
Summary
A guaranteed order is a type of financial transaction in which a buyer agrees to purchase a certain amount of a security from a seller at a predetermined price. The buyer is obligated to purchase the security regardless of market conditions, and the seller is obligated to provide the security at the agreed-upon price. Guaranteed orders are typically used in the stock market, but they can also be used in other types of financial markets, such as the bond market. For more information about guaranteed orders and other financial terms, you can visit websites such as Investopedia, The Balance, and Investing.com.
See Also
- Bond Purchase Agreement
- Stock Market
- Bond Market
- Financial Transaction
- Security
- Market Conditions
- Investopedia
- The Balance
- Investing.com
- Stock Trading
