SIE practice questionmediumOrder Types—Limit Orders
A limit order to buy at $30 is placed when a stock is trading at $32. What happens to the order if the stock trades down to $30?
- AIt is automatically canceled
- BIt executes at whatever the market price is when placed
- CIt will execute at $30 or better✓ Correct answer
- DIt converts to a market order
Explanation
Why C — It will execute at $30 or better
A buy limit order executes at the limit price or better (lower). It does not execute until the stock hits $30 or below. The order is not canceled or converted to a market order.
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