A market order has: a. Price uncertainty but not execution uncertainty. b. Both price uncertainty and execution uncertainty. c. Execution uncertainty but not price uncertainty.

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Business

Wesley Douglas

Yesterday, 23:46

A market order has: a. Price uncertainty but not execution uncertainty. b. Both price uncertainty and execution uncertainty. c. Execution uncertainty but not price uncertainty.

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Answers (1)

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Antoine Petty · Answer 1

The correct answer is letter "A": Price uncertainty but not execution uncertainty.

Explanation:

When talking about trading orders, a market order is executed whether to buy or sell a security at market price. The market order does not follow the security's price at the bid or ask, it usually follows the last price at which the security was sold. Thus, that price is always uncertain.

The benefit of market order relies on the execution. Traders will not have to wait until another trader is willing to buy or sell at their desired level. The market order will execute the order almost automatically at the price the market has available.