Trading, Accounts & Prohibited ActsQuestion 175 of 398
An investor wants to buy XYZ stock, currently trading at $52, but is only willing to pay $50 or less per share. Which order type best fits this goal?
a.A buy limit order at $50
b.A market order
c.A buy stop order at $50
d.A sell stop order at $50
Explanation
A buy limit order sets the maximum price the buyer is willing to pay, so it executes only at $50 or lower. A market order would fill immediately near $52. A buy stop is a trigger order placed above the market, not a price ceiling.
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