• Discretionary orders are those in which the broker has some leeway in dealing with orders on behalf of the client without their explicit authorization for each individual decision or order detail.
  • Discretion most often accompanies conditional orders, such as setting a price cap in response to changing market conditions.
  • Discretionary orders are also a key component of discretionary investment management, where a broker or advisor trades on behalf of a client without being informed of every action.
  • Discretionary orders release the broker from liability for potential losses that their client may incur if they use their discretion for the purpose of best execution.