Reserve + Threshold Triggered Order (Reserve + TTO)

A reserve + TTO order combines a reserve order with a threshold triggered order. Once the reserve order has been filled, a threshold triggered order is automatically set in motion.

Example: An investor wants to buy 500,000 shares in a company’s stock at the lowest possible price. The investor knowns that bidding on the full 500,000 shares on an exchange in a single bid may cause demand to temporarily exceed supply, which could cause the price of the shares to climb before their broker is able to buy them. To avoid driving up the price of the stock which they want to buy, the investor wants their 500,000-share buy order to be broken up into 50 small orders of 10,000 shares each. They also know that once they buy the 500,000 shares, they want to sell them as soon as their price reaches 25 Swiss francs per share. To protect their investment, they would like to instruct their broker to sell the shares if their price falls to 18 francs or lower.

By using a reserve + TTO, the investor can accomplish all of this in a single order before making the investment. The reserve order allows them to break up the first part of the order (the buy order in this case) into multiple smaller orders which are sent to the exchange one at a time, with each new order only sent when the last has been filled. The threshold triggered order (in this case the sell order portion of the reserve + TTO) lets them specify an upper threshold which, if reached, will trigger the sale of the assets. It also lets them specify a lower threshold which, if surpassed, will trigger the sale of the assets to prevent loss.

More on this topic:
Swiss stock broker comparison
Order types offered by Swiss brokers compared

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Editor Daniel Dreier
Daniel Dreier is editor and personal finance expert at moneyland.ch.