medium · Market Microstructure mmf-core
A trader places a 'Stop-Limit' order to sell 1,000 shares of CAT with a stop at $240.00 and a limit at $239.50. The stock is trading at $241.00. Suddenly, bad news breaks and the first trade after the news is at $238.00.
What happens to the trader's order?
- It is cancelled because the market 'gapped' through the limit
- It executes at $239.50 as a 'guaranteed' price
- It is triggered but remains an unexecuted limit order
- It executes immediately at $238.00
Sign up free to see the explanation and track your rank →
More Market Microstructure mmf-core practice
- A stock is trading at $100.00. The Level 1 S&P 500 Market-Wi… — What is the status of trad
- If the stock gaps down and opens at $69.50 on Tuesday morning, at what price will the trad
- Using the Lee-Ready algorithm, how should a trade occurring at $50.10 following a $50.00 t
- During the pre-open period of an opening auction, the exchan… — What is the primary purpos
- If a stock enters a 'limit state' and does not recover within 15 seconds, what is the regu
- A retail trader hears a stock tip on a popular social media… — How is this trader classifi
- A corn farmer is worried that prices will drop before the harvest in three months. The far
- What is the clearing price that maximizes volume?