It stands for mid-point discretionary order; a discretionary order (specifically, a limit order) to trade a specific security, with the trading price pegged to the midpoint of the national best bid and offer (NBBO). A midpoint discretionary buy order (buy MDO) is a limit order to buy that is pegged to the national best bid (NBB), with discretion to execute at prices up to and including the midpoint of the NBBO.
A midpoint discretionary sell order (sell MDO) is a limit order to sell that is pegged to the national best offer (NBO), with discretion to execute at prices down to and including the midpoint of the NBBO.
The midpoint discretionary order (MDO) combines the characteristics of primary peg, midpoint peg and discretionary orders. Traders can use MDOs to post displayed or non-displayed liquidity at the respective national-level price within a discretionary range extending to and including the NBBO midpoint. For that reason, MDOs do not execute at a price more aggressive (lower for buy orders and higher for sell orders) than the NBBO midpoint.
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