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 9:56:00, what is the National Best Offer Price?

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

Answer 1

National Best offer Price at 9:56 is a. [email protected] because after 9:39 it is qouting the same till 9: 56..

and 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

Since even if we miss the chance to get out, we will then simply wait for the price to go back up and may not wish to sell at that limit price at that point, because the stock may continue to rise.

stop-limit orders are used for short sales where the investor is willing to risk waiting for the price to come back down if the purchase is not made at the limit price or better.