Definition of the word standing order

The term "standing order" refers to a specific type of instruction given to a financial institution, typically a broker or bank, to execute buy or sell transactions for a particular financial instrument automatically and repeatedly at designated intervals until the order is cancelled or the position is closed. This continuous purchase or sale arrangement helps investors to maintain a consistent exposure or average price in the market. The origins of this financial concept can be traced back to the 19th century when brokers began to simplify the process of buying and selling stocks by offering standing orders to their clients. The first known use of the term "standing order" in this context dates back to a book published in 1879 by an English banker named Robert Lowe, who defined it as "an order to buy or sell a particular stock or commodity, which continues in force until fulfilled, or until countermanded by the principal." The concept has since evolved and become an essential tool for investors seeking convenience, liquidity, and efficiency in their portfolio management strategies.