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What is the downside of using a market order in trading options?
  • a)
    It guarantees the best available price for the trade
  • b)
    It allows for negotiation with the counterparty
  • c)
    The fill may occur at a slightly lower or higher price than expected
  • d)
    It is only suitable for trading during the opening rotation of the market
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
What is the downside of using a market order in trading options?a)It g...
The downside of using a market order in trading options is that the fill may occur at a slightly lower or higher price than expected. The price at which a market order is filled is determined by the best available price in the market at the time of execution, which can change rapidly.Additional Fact: Market orders in options trading are generally not recommended due to the potential for slippage, where the actual execution price differs from the expected price. Limit orders, on the other hand, provide more control over the execution price but may not guarantee immediate execution.
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What is the downside of using a market order in trading options?a)It guarantees the best available price for the tradeb)It allows for negotiation with the counterpartyc)The fill may occur at a slightly lower or higher price than expectedd)It is only suitable for trading during the opening rotation of the marketCorrect answer is option 'C'. Can you explain this answer?
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What is the downside of using a market order in trading options?a)It guarantees the best available price for the tradeb)It allows for negotiation with the counterpartyc)The fill may occur at a slightly lower or higher price than expectedd)It is only suitable for trading during the opening rotation of the marketCorrect answer is option 'C'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What is the downside of using a market order in trading options?a)It guarantees the best available price for the tradeb)It allows for negotiation with the counterpartyc)The fill may occur at a slightly lower or higher price than expectedd)It is only suitable for trading during the opening rotation of the marketCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the downside of using a market order in trading options?a)It guarantees the best available price for the tradeb)It allows for negotiation with the counterpartyc)The fill may occur at a slightly lower or higher price than expectedd)It is only suitable for trading during the opening rotation of the marketCorrect answer is option 'C'. Can you explain this answer?.
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