Chapter 5 Crunch time

Question 1

what kind of orders are “triggered” (activated) when a contract trades at, or through, the stop price

Answer 1

stop and stop limit orders

Question 2

this order is placed above the market and is triggered when bid at the stop price

Answer 2

buy stop orders

Question 3

this order is placed below the market and is triggered when offered at the stop price

Answer 3

sell stop orders

Question 4

once activated, stop orders become…

Answer 4

market orders

Question 5

once activated, stop-limit orders become…

Answer 5

limit orders

Question 6

these orders, once activated, become market orders for immediate execution at the market price

Answer 6

MIT (market if touched) orders

Question 7

an order to buy or sell that must be executed immediately, with any unexecuted portion being canceled

Answer 7

immediate or cancel

Question 8

an order to buy or sell that must be filled in its entirety or canceled since partial fills are not permitted

Answer 8

all or none (AON) order; these orders typically have a long duration