An institutional trader is configuring order entry instructions for a trading algorithm. Match each specific order type or execution qualifier on the left with its corresponding trigger condition and execution rule on the right.
- Fill-or-Kill (FOK)Must be executed immediately in its entirety at the specified limit price or better; if the full order cannot be filled immediately, the entire order is canceled.
- Immediate-or-Cancel (IOC)Must be executed immediately, either in full or in part at the specified limit price or better, with any unexecuted portion immediately canceled.
- Buy Stop-LimitActivated when the stock trades at or above a specified trigger price, subsequently converting into an order to buy at the specified limit price or lower.
- Market-on-Close (MOC)Executes as close to the official market closing price as possible, but will be canceled if trading in the security is halted prior to the market close.
Answer
Fill-or-Kill pairs with mandatory immediate full fill or cancellation; Immediate-or-Cancel pairs with immediate partial fill permission and cancellation of remaining shares; Buy Stop-Limit pairs with activation at or above the stop price converting to a buy limit order; Market-on-Close pairs with execution target at the official closing price subject to active trading.
Each order type and qualifier correctly aligns with FINRA and exchange execution definitions: FOK demands an immediate full fill, IOC permits immediate partial fills, Buy Stop-Limit converts to a limit order upon reaching the stop price, and MOC targets the market closing price.
Step-by-Step Solution
Key Concept
Order Types and Execution Qualifiers