Question

1. Which of the following statements about types of order(s) is / are inaccurate?

   1. Market orders are orders to buy or sell at the best price available.

   2. Limit orders are orders to buy or sell at or away from the market price.

   3. A stop buy order is typically used to protect a short position in a security and

      is placed below the current market price.

   4. All of the above options are inaccurate.

Answer 1

A market order is the order which is executed immediately at the best available price in the market

A limit order is the order which is executed at the specified price or better

A stop order is used to limit losses. A stop buy order is placed to protect short positions and is generally placed above market price. The stock is bought when the limit breaches at the next available price

Hence, the inaccurate statement is

A stop buy order is typically used to protect a short position in a security and

is placed below the current market price.

As it is placed above market prices

Other statements are correct