Question

You have purchased 10,000 shares of E*Bay on margin at a price of $40.00 per share. You have a day job that prevents you from monitoring the market during the trading day. What type of order can you use if you are worried that your broker will liquidate your account if the price of E*Bay falls to $26.00 per share? Currently, the National Best Bid Price for E*Bay is $42.12 (300 shares bid) and the National Best Offer price for E*bay is $42.19 (800 shares offered). a. A limit order to sell 10,000 shares of E*Bay at a price of $30.00 per share. b. A stop limit order to sell 10,000 shares of E*Bay at a price of $27.00 per share with a stop price of $55.00. c. A market order to sell 10,000 shares of E*Bay. d. A stop market order to sell 10,000 shares of E*Bay with a stop price of $27.00.

You have the following information on quotes for ACME common stock:

Time	Exchange	Bid Price	Bid Size	Offer Price	Offer Size
9:30:00	NYSE	55.00	10,000	59.00	100
9:30:01	EDGX	54.75	200	55.33	100
9:30:02	BZX	50.00	300	62.00	1,600
9:30:03	NDAQ	54.88	100	61.00	100
9:39:00	NDAQ	52.00	100	63.00	100
9:40:45	EDGX	51.98	200	55.44	1,500
9:45:00	BZX	50.00	1,000	60.00	400
9:45:30	EDGX	51.98	400	54.32	600
9:46:55	BZX	50.00	200	60.01	900
9:50:05	EDGX	51.52	300	57.56	600
9:52:10	BZX	50.00	100	60.02	800
9:55:44	NYSE	51.99	300	55.34	600
9:59:59	BZX	52.00	100	56.00	100

At 9:53:00, what is the National Best Offer Price?

	a.	[email protected].
	b.	[email protected].
	c.	[email protected].
	d.	[email protected].

Answer 1

1. 10,000 shares of E*bay has been purchased at $40 per share. I want to make sure that i do not lose my investment and earn profit at the same time. Therefore i'll select option C. Here i can prevent the liquidation as well as sell my holdings at the stop price of $55 or buy more shares at $27 per share.

2. The nearest quote to 9:53 is the BZX quote at 9:52:10. Therefore the national best offer price is 60.02 at 800 offer size. Option C should be selected.