Trading, Accounts & Prohibited ActsQuestion 208 of 398
Which of the following is a primary risk of using a limit order instead of a market order?
a.The order will always execute at a worse price than the market
b.The order may never be executed if the limit price is not reached
c.The order guarantees execution but not a price
d.The order must be canceled at the end of every trading day
Explanation
A limit order controls the execution price but does not guarantee a fill; if the market never reaches the limit, the order goes unexecuted. A market order, by contrast, guarantees execution but not a specific price.
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