6.14.2005

Q&A: which order is most likely to be executed sooner...

...: limit buy, limit sell, market, stop or day?

A: Market order is executed immediate at the prevailing price.

  • Limit order: A condition placed on a transaction executed through a stockbroker to assure that securities will be sold only if a specified minimum price is received, or purchased only if the price to be paid is no more than a given maximum.
  • Stop order: A mechanism for locking in gains or limiting losses on securities transactions. The investor is not assured of paying or receiving a particular price but rather agrees to accept the price prevailing when the broker is able to execute the order after prices have reached some predetermined figure
  • Day order: automatically cancelled at the end of the day

Bonus Points

  • A stop-limit order is different from a simple stop order in that once the stock price reaches the preset stop price the order is converted into a limit order.
  • A short sale is the sale of stock that you do not own with the intent of purchasing it back later at a lower price.
  • When an investor buys or sells a security, he must deliver the cash or certificate to the broker within 3 days (settlement).

Category: C++ Quant > Financial Markets

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