Suppose the bid price for GE stock is $12.00 and the asked price is $12.25. (a)...
Suppose the bid price for GE stock is $12.00 and the asked price is $12.25. (a) Suppose you have submitted an order to sell at market. At what price will your trade be executed? (b) Suppose you have submitted a limit order to sell at $12.20. Does your order get executed? If so, at what price? (c) Suppose you have submitted a stop-sell order to sell at $12.20. Does your order get executed? If so, at what price?
Homework Answers
| Price | |
| Bid Price | $12 |
| Ask Price | $12.25 |
a. Order will be executed at the bid price i.e $12 , since its a market order.
b. The order will not be executed at the limit order price i.e $12.20 , since in limit order, the trade will be executed only at the limit order price and current bid price is $12.
c. In stop sell order the trade will be executed if the price of stock falls below $12.20. Since market price is not given, we cannot find the price at which trade will be executed.
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Suppose the bid price for GE stock is $12.00 and the asked price
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