SIE Exam Question 469: Answer and Explanation

Question: 469

ABC Technologies, a very volatile stock, closes at $180 per share. Your customer has placed an order to sell 500 ABC at 165 stop limit 160 GTC. After the close, the company announces bad earnings and the stock opens at 145. What happened to your customer's order?

• A. It has been elected and has become a limit order.
• B. It has been canceled because the stock price is below the limit price.
• C. It has been canceled because the stock price is below the stop price.
• D. It has been elected and executed.

Correct Answer: A

Explanation:

A: The order has been elected because the stock has traded through the stop price. The order has now become a limit order to sell the stock at 160.