Question

Suppose you submit a sell limit order to a stock exchange. Your limit order will be...

Suppose you submit a sell limit order to a stock exchange. Your limit order will be posted...

(a) on the ask side of the limit order book

(b) on the bid side of the limit order book  

??? and why?

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Answer #1

A sell limit order will be posted on the ask side of the limit order book

Bid side shows the maximum price a buyer willing to pay for a stock

Ask side (offer price) shows the minimum price a seller willing to receive for a stock

A sell limit order is an order to sell a stock at a certain price (limit price) or higher. In other words, a sell limit order offers(ask) to market to sell stock at certain price or higher price than certain price.

In above case, sell limit order will be posted on the ask side because this order offer(ask) to sell the stock.

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