Question

The following are a quote of GOOG stock traded on NASDAQ. Bid Ask GOOG 547.99 549.25...

The following are a quote of GOOG stock traded on NASDAQ.

Bid Ask
GOOG 547.99 549.25


What will happen if you submit the following orders?

Submit a stop-loss sell order at $550. (Assume that the stock drops from $580.)

A Order is not filled.

B Order is filled at $547.99.

C Order is filled at $549.25.

D Order is filled at price that you specify.

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Homework Answers

Answer #1

In case we have selected the stop loss sell Order, Order will be placed as stop loss price is crossed.

In the present case Stop loss is $ 550

Bid Price - Is the Max price that buyer is willing to pay to buy the stock

Ask Price os the minimum price that seller is willing to receive t o sell the stock

Here Buyer is willing to pay max of $ 547.99 whereas seller is willing to receive min of $ 549.25, thus as there is no intersection point, the order will not get executed.

Option A is correct

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