Question

Consider the following limit order book for a share of stock. The last trade in the stock occurred at a price of $145

Limit Buy Orders	Limit Sell Orders
Price    Shares	Price   Shares
$144.75 800	$145.25 120
144.50    1100	146.50 120
144.25 800	149.75 200
144.00 200	153.25 120
143.50 900

After fill the market order in previous question, at what price would the next market buy order of 120 shares be filled? (Round your answer to 2 decimal places.)

Next best price:

Answer 1

As the last trade in the stock is occured at a price of $145 and now by looking at the limit sell order book it is clear that the next best price in available in the market for the stock is $145.25 and at this price 120 shares are available for the sale.

At this time if buyer places a market order for 120 shares then if will be filled at the best available price that is $145.25 because the buyer wants to buy 120 shares and full 120 shares are available at $145.25.

Therefore answer to this question is $145.25