medium · Market Microstructure
A 'Stop-Limit' order to sell at a stop of 50.00 and a limit of 49.50 is placed.
If the market gaps from 50.05 down to 49.25 on an earnings announcement, what happens to the order?
- It executes immediately at 49.25
- It executes at the limit price of 49.50
- The order is automatically cancelled
- It triggers but does not execute
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