Gujarat BoardEnglish MediumSTD 12 CommerceOCMFINANCIAL MARKET3 Marks
Question
Explain limited order and market order methods of trading.
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Answer
$(a)$ Limited order:
When an investor selects the option of ‘limited order’, it means that he will set the price at which he needs to purchase or sell the shares. Thus, in this case, the price of purchase and sale is pre-determined.
Retail investors and fund houses generally trade by placing order in this format.
$(b)$ Market order:
When an investor wants to trade at the prices existing in the market, he selects ‘market order’. Here, the buying/selling iakes place at the latest quoted market price that appeared on the trading screen order was made.
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