ORDERS AND EXECUTION STRATEGIES

Question 1

Limit Order

Answer 1

Buy/sell at a specified price or better—may not fill immediately.

Question 2

Market Order

Answer 2

Execute immediately at the best available price—fills quickly but price may vary.

Question 3

Stop-Market

Answer 3

Trigger a market order once price reaches a specified level.

Question 4

Stop-Limit

Answer 4

Trigger a limit order once price reaches a specified level.

Question 5

GTC

Answer 5

Good ’Til Canceled: order stays active until filled or manually canceled.

Question 6

IOC

Answer 6

Immediate Or Cancel: execute any available portion immediately; cancel the rest.

Question 7

FOK

Answer 7

Fill Or Kill: must be entirely filled immediately or fully canceled.

Question 8

OCO

Answer 8

One Cancels the Other: two linked orders where execution of one cancels the other.

Question 9

Iceberg Order

Answer 9

Large order disguised by showing only a small portion on the order book at a time.

Question 10

TP (Take Profit)

Answer 10

Conditional order to close a position at a set profit level.

Question 11

SL (Stop Loss)

Answer 11

Conditional order to close a position at a predefined loss threshold.

Question 12

TWAP

Answer 12

Time-Weighted Average Price: execution method slicing a large order into equal time intervals.

Question 13

VWAP

Answer 13

Volume-Weighted Average Price: execution or benchmark price averaged by trade volume.