SIE Exam Question 201: Answer and Explanation

Question: 201

An order to buy or sell a stock at the best available price when the order is placed is a __________ order.

• A. Limit
• B. Stop
• C. Market
• D. Stop limit

Correct Answer: C

Explanation:

A market order is an order to buy or sell at the best available price at the time the order is placed. A limit order is an order to buy at or below a specific price or to sell at or above a specific price. A stop is an order to buy or sell a stock when its market price reaches or drops below a specified price. A stop limit order is an order to buy or sell at a specific price or better once a given stop price has been hit.