Question

You want to sell a stock but you believe the current price of this stock is too low. You will be willing to sell the stock if the price is at least 3% higher than the current price. What type of order do you want to place with your broker?

		limit buy order
		limit sell order
		market buy order
		market sell order

Answer 1

I would like to place Limit Sell order with my broker becuase:

Limit Sell order is an order to sell a security at or above a specified price. To ensure a great increase in price, the order must be placed at or above the current market price which must be atleast 3% higher than current price in the above question.

Reasons for not choosing:
Limit Buy Order: It is an order to purchase a security at or below a market price. It must be placed on the correct side of the market to ensure they will accomplish the task of improving the price. For a buy limit order, this means placing the order at or below the current market bid.

Market Buy Order: It is an order to buy or sell immediately at the current price. Suppose if you are going to buy a stock, then you will pay a price at or near by price at the market.

Market Sell Order: This order means selling shares at the prevailing market prices until the order is filled. If you are going to sell a stock, you will receive a price at or near the posted bid.