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Zorluk: OrtaTypes of Orders and Order Execution Strategies

A customer instructs a firm to enter an Immediate-or-Cancel (IOC) buy limit order for 1,000 shares at 25.00pershare.Uponroutingtothemarket,400sharesareavailableat25.00 per share. Upon routing to the market, 400 shares are available at 24.95 and 300 shares are available at 25.00,whileallotherselloffersare25.00, while all other sell offers are 25.10 or higher. Which of the following best describes how this order will be executed?

  1. 700 shares execute immediately (400 at 24.95and300at24.95 and 300 at 25.00), and the remaining 300-share portion is automatically canceled.Cevap
  2. B
    The entire 1,000-share order is canceled immediately without any execution because the full order size could not be satisfied at once.
  3. C
    700 shares execute immediately, and the remaining 300 shares are placed on the order book as a limit order at $25.00 for the rest of the trading day.
  4. D
    The broker-dealer is obligated to act as a dealer and sell the remaining 300 shares to the customer from its own inventory at $25.00.

Cevap

700 shares execute immediately (400 at 24.95and300at24.95 and 300 at 25.00), and the remaining 300-share portion is automatically canceled.
An Immediate-or-Cancel (IOC) order instructs the trading venue to execute whatever portion of the order is immediately available at the specified limit price or better, and to cancel any portion that cannot be filled right away. Because 700 shares are available at or below the 25.00limitprice(400sharesat25.00 limit price (400 shares at 24.95 and 300 shares at $25.00), those 700 shares fill immediately, and the remaining 300 shares are canceled.

Adım Adım Çözüm

1
Analyze the order type and execution qualifier constraints.
The order is a buy limit order at $25.00 with an Immediate-or-Cancel (IOC) qualifier.
IOC requires immediate execution of any available shares at or below the limit price ($25.00), with any unfilled quantity canceled.
2
Determine available liquidity at or below the limit price of $25.00.
400 shares at 24.95and300sharesat24.95 and 300 shares at 25.00 meet the price requirement, totaling 700 executable shares.
Offers priced higher than 25.00(suchas25.00 (such as 25.10) exceed the buy limit price and cannot be filled.
3
Apply the IOC rule to the unexecuted portion of the order.
The remaining 300 shares (1,000 - 700) cannot be filled immediately and must be canceled.
Unlike standard limit orders, IOC orders never rest on the order book for future execution.

Anahtar Kavram

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

Types of Orders and Order Execution Strategies