Limit Order Information System (LOIS)

What Is a Limit Order Information System?

A limit order information system is an electronic system (LOIS) used by specialists in the stock market. A limit order information system lists price and size quotes for exchange-listed securities. The data produced by this system is used by subscribers and specialists to locate the best market for making a trade because the service distributes information about where a security is traded, order quantities, and bid and offer prices.

Understanding a Limit Order Information System (LOIS)

A limit order information system is used to locate the best securities prices available and produces information about securities traded on participating exchanges like the Nasdaq and New York Stock Exchange. A limit order is an order to buy or sell a stock at a specific price and includes information such as order quantities, bid price, offer price, and the exchange on which the security is listed. Limit orders help protect buyers or sellers of a stock from selling at a price that is higher or lower than desired.

Limit Orders

A limit order is a take-profit order placed with a bank or brokerage to buy or sell a set amount of a financial instrument at a specified price or better; because a limit order is not a market order, it may not be executed if the price set by the investor cannot be met during the period of time in which the order is left open.

While the execution of a limit order is not guaranteed, it does ensure that the investor does not miss the opportunity to buy or sell at the target price point if it is dealt in the market. Depending on the direction of the position, a limit order is sometimes referred to as a buy limit order or a sell limit order. For example, a buy limit order that stipulates the buyer is not willing to pay more than $30 per share, while a sell limit order may require the share price to be at least $30 for the sale to take place.

Order Management System

An Order Management System, or OMS, is a computer software system used in a number of industries for order entry and processing. Orders can be received from businesses, consumers, or a mix of both, depending on the products. Offers and pricing may be done via catalogs, websites, or broadcast network advertisements.

Another use for order management systems is as a software-based platform that facilitates and manages the order execution of securities. Order management systems, sometimes known in the financial markets as trade order management systems, are used on both the buy-side and the sell-side, although the functionality provided by buy-side and sell-side OMS differs slightly. Typically, only exchange members can connect directly to an exchange, which means that a sell-side OMS usually has exchange connectivity, whereas a buy-side OMS is concerned with connecting to sell-side firms.