Series 7 practice questioneasyOrder Types — Market Orders
A customer places a market order to buy 100 shares of XYZ stock. Which of the following best describes how this order will be executed?
- AAt the best available ask price as soon as possible✓ Correct answer
- BAt the closing price of the trading day
- CAt the price specified by the customer
- DAt the opening price of the next trading day
Explanation
Why A — At the best available ask price as soon as possible
A market order is an order to buy or sell a security immediately at the best available current price. Market orders prioritize speed of execution over price, meaning the order will be filled at the best available ask price (for buy orders) or bid price (for sell orders). There is no price guarantee, but execution is virtually certain when the market is open.
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