SIE practice questionhardTrade Execution
A firm receives a customer limit order to buy at $25 when the market is at $24.98. If the firm executes the trade for its own account at $24.99 before the customer’s order is filled, what violation has occurred?
- AChurning
- BTrade ahead✓ Correct answer
- CBreakpoint selling
- DInsider trading
Explanation
Why B — Trade ahead
Trading ahead means the firm executes for its own account before a client’s limit order at the same or better price. The other violations listed do not apply to this scenario.
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