SIE practice questionmediumOrder Types - Stop-Limit
A stop-limit order to sell is triggered at $30 but specifies a limit of $28. What happens if the stock falls rapidly from $33 to $27?
- AThe order is never triggered
- BThe stock is sold at any available price below $30
- CThe order is activated but may not execute✓ Correct answer
- DThe order is immediately executed at $27
Explanation
Why C — The order is activated but may not execute
A stop-limit sell order triggers at $30, becomes a limit order at $28. If the stock falls straight to $27, the limit may not be met and there’s no execution.
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