Question

6. When would you prefer to use a limit order vs. a market orde

6. When would you prefer to use a limit order vs. a market orde

Homework Answers

Answer #1

A limit order is preferred is when you are concerned about the exact buy or sell price for the transaction. You want to sell a security only if it trades above a certain limit or you want to buy a security only if it trades below a certain limit. In such scenarios, you should consider limit orders

Market orders are typically used when you want to sell a certain quantity of security irrespective of the trade price. If you have 10,000 shares of a company and want to sell everything for whatever price is available in the market, you use market orders.

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