The full form of DNR in banking can refer to Do Not Reduce.
Do Not Reduce (DNR) Order Explained
In the context of stock trading related to banking and finance, a "Do Not Reduce" (DNR) order is an instruction given when placing an order for stocks. This instruction specifies that the price of the order should not be reduced by the amount of any cash dividend paid out on the ex-dividend date.
Normally, when a stock pays a cash dividend, the price of a Good 'Til Canceled (GTC) order would be reduced by the dividend amount on the ex-dividend date. This adjustment reflects the decrease in the stock's value due to the dividend payout.
A DNR order overrides this standard adjustment. By using a DNR order, the investor intends to maintain their original target price, regardless of any dividends distributed.
Example:
Suppose you place a GTC order to buy a stock at $50. The stock then declares a $1 dividend and goes ex-dividend. Without a DNR order, your order price would automatically be reduced to $49. However, if you had specified DNR, your order would remain at $50.
