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Zorluk: KolayTypes of Orders and Order Execution Strategies

An institutional trader enters an order to purchase 2,0002,000 shares of stock with an Immediate-or-Cancel (IOC) qualifier. Which of the following statements regarding the handling and execution mechanics of this IOC order are correct?

  1. Partial executions are permissible, with any remaining unfilled portion of the order canceled immediately.Cevap
  2. B
    The activation turns the order into a market order that guarantees execution at the specified limit price.
  3. The order must be executed immediately upon entry, and any unexecuted shares cannot remain on the order book.Cevap
  4. D
    A broker-dealer executing this order in an agent capacity buys the shares from its own inventory and charges a mark-up.

Cevap

The statements allowing partial fills with immediate cancellation of the remainder, and requiring immediate execution without staying on the order book, are correct.
An Immediate-or-Cancel (IOC) order requires that all or part of the order be executed immediately upon entry into the market. Partial fills are accepted, and any unexecuted portion is automatically canceled rather than remaining active on the order book. Therefore, both statements describing partial execution handling and immediate cancellation without sitting on the order book are correct.

Adım Adım Çözüm

1
Analyze the features of an Immediate-or-Cancel (IOC) order qualifier.
IOC orders demand immediate execution upon order entry. Unlike Fill-or-Kill (FOK) orders, IOC orders permit partial executions.
Understanding time-in-force qualifiers is essential for determining order routing and cancellation behaviors.
2
Evaluate the statement regarding partial fills and cancellation.
The rule allowing partial execution while immediately canceling unfilled shares is correct.
IOC instructions specifically mandate that any portion not filled right away must be canceled.
3
Evaluate the statement regarding order book retention.
The rule requiring immediate execution without remaining on the order book is correct.
Unfilled IOC shares are never allowed to sit on the order book for later execution.

Anahtar Kavram

Immediate-or-Cancel (IOC) Order Execution Rules
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Konular

Types of Orders and Order Execution Strategies