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I'm TA:ing a programming course and am writing up the instructions for a lab in which the students will implement a toy stock trading platform. I'm not too familiar with financial lingo, so there is this one term I need some help with.

What's the term generally used for a completed trade? That is, I want to buy 10 shares in X at $10 per share, you want to sell 10 shares in X at $10 per share, so I buy your 10 shares and now we have a... what?

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    Why aren't you happy with the term you used yourself in the question? "...I buy your 10 shares and now we have a completed trade". – FumbleFingers Oct 21 '14 at 16:30
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    Is there no specific term used for this in English then? Literally translated from my native language, such a completed trade would be called a close and is more specific than just a "completed trade". – valderman Oct 21 '14 at 16:40
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    The trade is closed, or settled after delivery of shares vs payment. – user66974 Oct 21 '14 at 16:49
  • Well, you're obviously familiar with the close usage in English, since your question title refers to closing a stock trade. All of which suggests you already know "normal" English usage in this general area. I think you might be well advised to avoid too much domain-specific terminology (which is probably Off Topic anyway). For example, despite the fact that I'm a perfectly competent native speaker, I had to Google abbreviation ta to figure out what on earth the second "word" in your question meant. Specialist terminology is for geeks, not normal people. – FumbleFingers Oct 21 '14 at 16:53
  • A "closed trade" or a "confirmed trade." And @FumbleFingers a TA is not a technical term in the USA. – pazzo Oct 21 '14 at 19:21
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Just so we're clear on this:

  1. My expressed desire to buy 10 shares of AAPL is called a bid
  2. Your expressed desire to sell 10 shares of AAPL is called an offer (or ask)

The hypernym for bid and offer is quote, and the instruction by which you express this quote is an order; but, critically, n̲o̲n̲e̲ ̲o̲f̲ ̲t̲h̲e̲s̲e̲ ̲t̲h̲i̲n̲g̲s̲ ̲i̲s̲ ̲a̲ ̲t̲r̲a̲d̲e̲.

So what do you call it when my bid (order to buy) matches your offer (order to sell) such that I get your stock, and you get my cash?

That is the trade. The word you're looking for is trade. The trade is distinguished from the earlier actions (bidding, offering) because those are quotes: desires, intents; the trade is the transaction.

Therefore, there is no need for additional adjectives, or a different word, for a "done" trade or a "closed" trade; a trade is, by definition, closed and done.


Aside: you will sometimes hear "closed trade" in the securities industry, but here "trade" is used metaphorically or figuratively to mean "trading idea", or "strategy", and is technically a closed "position", which takes two actual, literal, trades to effect (one to open the position, and the other to close the position, and capture the profit or loss).

Also, in the specific scenario you're describing, where one student in your class is trading with another student in your class, and neither one has to go to the open market to find a counterparty, what you've got is an internal cross or just cross (which is done -- you guessed it -- through internalization).

In the US, all trades, whether internalized (crossed) or done on a public exchange or ATS (where orders are said to be matched as opposed to crossed), are still required to be reported to the public, and so your students' internal trade will still show up on the tape as a tick.

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I want to buy 10 shares in X at $10 per share, you want to sell 10 shares in X at $10 per share, so I buy your 10 shares and now we have a...

...deal.

You have agreed terms, you have executed the trade, you have a (done) deal.

I cannot think of a general single-word term to describe making the agreements and doing the trade. However as a point of interest (hopefully), in the insurance sector (UK) the term 'bind' refers to the moment the prospective Insured accepts the terms, promises to pay the money and therefore instates the insurance. From the moment the "risk" is "bound" the insured is covered. I don't think this word-use applies to any other transaction though.

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According to Investopedia, Understanding Order Execution, an order is completed when it is filled.

Often investors and traders alike do not fully understand what happens when you click the "enter" button on your online trading account. If you think your order is always filled immediately after you click the button in your account, you are mistaken. In fact, you might be surprised at the variety of possible ways in which an order can be filled and the associated time delays.

In the Investopedia dictionary:

Fill: The action of completing or satisfying an order for a security or commodity. It is the basic act in transacting stocks, bonds or any other type of security.

  • Yes, but here each student has an order, and each order gets filled, and so you're dealing with two fills, as opposed to the singular transaction (the trade) the OP is trying to name. See my answer. – Dan Bron Oct 22 '14 at 17:40
  • I don't know what you are talking about. A trade requires a buy order and a sell order. A buy order without a corresponding sell order cannot be considered filled. – Canis Lupus Oct 22 '14 at 17:47
  • And, I guess while I'm being pedantic about this: a fill can be partial; such that if the two students' prices agree, but quantities differ, one student can get a partial fill (say, 5 shares instead of 10), so at least that student would not consider the trade "complete" (he'd have to wait, or go elsewhere, to get his remaining 5 shares). – Dan Bron Oct 22 '14 at 17:47
  • It might help, while being pedantic, to provide one or more citations to (purportedly) authoritative references. – Canis Lupus Oct 22 '14 at 17:50
  • Yes? What did I say that contradicted your statement? What I said is there will be two fills. Not one fill. Each student gets a fill (the buy order gets filled, and the sell order gets filled, and, as I said above, it's possible that one of the orders doesn't even get completely filled). And there two fills do not correspond to the singular, atomic transaction OP is seeking. Dig? – Dan Bron Oct 22 '14 at 17:50

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