SIE practice questionmediumOrder Types
A client wishes to avoid the risk of rapid price swings. Which order type helps prevent unintended purchases due to sudden price moves, but could be manipulated by others repeatedly triggering the order?
- AMarket order
- BLimit order
- CStop order✓ Correct answer
- DFill-or-kill order
Explanation
Why C — Stop order
Stop orders can be triggered by sudden price moves, making them susceptible to manipulation. Limit orders specify a price, market orders fill at current prices, and fill-or-kill require immediate execution or cancellation.
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