Consider the following limit order book for a share of stock. The last trade in the...

Consider the following limit order book for a share of stock. The last trade in the stock occurred at a price of $145.

Limit Buy Orders	Limit Sell Orders
Price Shares	Price Shares
$144.75 800	$145.25 120
144.50 1100	146.50 120
144.25 800	149.75 200
144.00 200	153.25 120
143.50 900

If a market buy order for 120 shares comes in, at what price will it be filled? (Round your answer to 2 decimal places.)

Best price :

Solutions

Expert Solution

Market buy order is an order to buy a security immediately. This type of order exected immedately and does not guarantee the execution price.

A market order is executed at or near the current ask price. last-traded price is not necessarily be the priceponit at which a market order will get executed.

In this case the buyer wants to Buy 120 Share at Market order therefore the near ask price (Sell order) is $144.75 therefore the order will be filled @ price $144.75

Total buy price (Best price) = 120*144.75 = $17,370

jeff jeffy answered 1 year ago

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