Australian share trading has evolved rapidly, with new order types and regulatory changes shaping the way investors buy and sell on the ASX. One term that’s gaining traction among active traders in 2025 is the not-held order. But what exactly does it mean, how does it differ from a standard market order, and why is it especially relevant in today’s fast-moving markets? Let’s break down the essentials for every Australian investor.
What is a Not-Held Order? The Basics
A not-held order is a special type of instruction you give your broker when placing a trade. Unlike a regular market or limit order, a not-held order gives your broker or trading representative the discretion to decide the best time, price, and manner to execute your order within the trading day. You’re effectively telling your broker: “Use your judgment to get the best possible result, rather than simply filling this order immediately at the prevailing market price.”
- Discretion: The broker is not obliged to execute the order instantly or at a set price.
- Flexibility: The order can be worked throughout the day to capture better prices or avoid sudden market swings.
- Suitability: Often used for large trades, illiquid stocks, or when market volatility is high.
For example, if you want to sell 50,000 shares of an ASX-listed company, dumping them all at once could move the market against you. With a not-held order, your broker can break the order into smaller parcels and execute them when liquidity improves, aiming for the best overall result.
Why Not-Held Orders Matter in 2025
The landscape for retail and institutional investors is shifting in 2025, thanks to a mix of technology, regulatory changes, and evolving market dynamics:
- Increased Volatility: Ongoing global economic uncertainty and interest rate adjustments by the RBA have made price swings more common on the ASX.
- ASIC’s Enhanced Oversight: In March 2025, the Australian Securities and Investments Commission (ASIC) updated its guidance on broker obligations for handling not-held orders, focusing on transparency and best execution practices. Brokers must now provide clearer communication about how they’ll manage your order and disclose potential conflicts of interest.
- Algorithmic Trading: The rise of sophisticated trading algorithms has made it easier for brokers to work large not-held orders efficiently, minimising market impact and slippage.
These changes mean not-held orders are no longer reserved just for institutional investors. More sophisticated retail traders are leveraging them to manage risk and seek better outcomes, especially when trading in less liquid or more volatile stocks.
Benefits and Risks: Is a Not-Held Order Right for You?
While not-held orders offer flexibility, they’re not without trade-offs. Here’s what to consider before using one:
- Potential Benefits:
- Better execution by avoiding adverse price moves
- Reduced market impact for large trades
- Opportunity to capture price improvements throughout the day
- Risks to Watch:
- No Guarantees: Your order may not be fully executed, or may be partially filled at different prices.
- Dependence on Broker Skill: The outcome relies heavily on your broker’s expertise and judgment.
- Less Transparency: You may have less real-time visibility into how your order is being worked compared to a standard market order.
Consider the following example: Jane, a retail investor, wants to buy 25,000 shares in a mid-cap mining stock. She gives her broker a not-held order, allowing them to stagger the purchase over the trading day and avoid pushing the price up. Jane’s order is partially filled in the morning and completed in the afternoon, with the average purchase price coming in below the day’s high. However, if the market had rallied sharply, part of her order might have remained unfilled.
How to Use Not-Held Orders Effectively
If you’re considering not-held orders, keep these tips in mind:
- Communicate Clearly: Discuss your objectives and risk tolerance with your broker. Make sure you understand how they plan to handle your order.
- Stay Informed: Review your trade confirmations and account statements to monitor execution quality. Under new ASIC rules, brokers must provide more detailed reporting on not-held order outcomes.
- Match Order Type to Situation: Use not-held orders for large trades, thinly traded shares, or when market volatility is elevated. For smaller, highly liquid trades, a standard limit or market order may be simpler and just as effective.
Most importantly, only use not-held orders with brokers or platforms you trust and who have a proven track record of good execution. In 2025, many Australian online brokers offer advanced order types, but the human element remains crucial for these discretionary instructions.
Conclusion
Not-held orders are a powerful tool in the modern Australian investor’s toolkit—especially as markets become more complex and volatile. With ASIC’s 2025 regulatory updates, investors now have greater protections and transparency when using these flexible order types. If you’re trading larger parcels or want to minimise your market impact, it’s worth discussing not-held orders with your broker. Smart use of discretion can mean the difference between an average result and an excellent one.
