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Zorluk: OrtaTypes of Orders and Order Execution Strategies

An investor places a Good-'Til-Canceled (GTC) Buy Limit order for 500 shares of ABC stock at 30.00whenthestockistradingat30.00 when the stock is trading at 34.00 per share. Prior to the market open the next morning, positive news causes the stock to open at 35.50.Duringthetradingsession,thestockpricedropstoalowof35.50. During the trading session, the stock price drops to a low of 29.75 with active trading volume before recovering to close at $32.00. Assuming normal market operations and sufficient liquidity, which of the following statements accurately describes the outcome of this order?

  1. The order was executed at $30.00 or lower when the market price reached or fell below the limit price during the trading session.Cevap
  2. B
    The order was executed at the market opening price of $35.50 because market buying interest increased.
  3. C
    The order automatically converted into a market order at the opening bell and filled immediately at $35.50.
  4. D
    The broker-dealer filled the order from its proprietary inventory at the market closing price of $32.00 to guarantee order execution.

Cevap

The order was executed at $30.00 or lower when the market price reached or fell below the limit price during the trading session.
A Buy Limit order guarantees that an order will only execute at the specified limit price or a lower (better) price. When the stock dropped to an intraday low of 29.75,theconditiontobuyatorbelow29.75, the condition to buy at or below 30.00 was met, resulting in a successful fill at $30.00 or lower.

Adım Adım Çözüm

1
Analyze the mechanics of a Buy Limit Order.
A Buy Limit order sets the maximum price an investor is willing to pay. It can only be executed at the limit price (30.00)orbetter(lowerthan30.00) or better (lower than 30.00).
Understanding limit order execution boundaries is necessary to evaluate trade triggers.
2
Trace the price action of ABC stock during the trading day against the order parameter.
The stock opened at 35.50(above35.50 (above 30.00, no fill), traded down to 29.75(below29.75 (below 30.00, execution condition met), and closed at $32.00.
Determining when the stock price crosses the specified limit price identifies the exact execution window.
3
Evaluate execution outcome.
Because the stock price touched and breached 30.00downto30.00 down to 29.75, the buy limit order was triggered and filled at $30.00 or lower.
Confirms that the execution criteria were satisfied during the intraday dip.

Anahtar Kavram

Buy Limit Order Execution Rules
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Konular

Types of Orders and Order Execution Strategies