Which one of the following statements about limit orders is correct? A. The trade will be executed at the market price at the end of the third business day, if not executed previously at the limit price. B. The execution will occur at the regular open on the day following the day the trade is placed. C. The execution of the trade will occur prior to the close of trading on the day the trade is placed. D. The trade may be executed only at the limit price or better at any time prior to expiration or cancellation of the order.

Question

Jayce Christensen

Business

12 June, 04:23

Which one of the following statements about limit orders is correct? A. The trade will be executed at the market price at the end of the third business day, if not executed previously at the limit price. B. The execution will occur at the regular open on the day following the day the trade is placed. C. The execution of the trade will occur prior to the close of trading on the day the trade is placed. D. The trade may be executed only at the limit price or better at any time prior to expiration or cancellation of the order.

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Baldwin · Answer 1

Option D

Explanation:

A limit order refers to the form of terms of buying or sell a safe, at or better than a stated price. The transaction can only be performed at the maximum price or a cheaper one for purchase maximum orders, while the transaction will either be performed at the restricted one or perhaps a stronger one for sale limit instructions.

It can also be compared with something like a market order, under which a transaction is carried out at the current market value with little or no defined time cap.