In the central limit order book for XYZ share, the price at the top of BUY is $49.520 (quantity 4025) while the price at the top of SELL is $49.600 (quantity 1562) and the price just below is $49.650 (quantity 300).A trader puts a BUY market order for 1,600 XYZ shares.Give the number of XYZ shares that the trader will buy at $49.650. Do not type a dollar sign and do not type comas.
Question
In the central limit order book for XYZ share, the price at the top of BUY is 49.600 (quantity 1562) and the price just below is 49.650. Do not type a dollar sign and do not type comas.
Solution 1
38
Solution 2
The trader will buy 38 XYZ shares at $49.650. Here's the step-by-step explanation:
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The trader places a buy market order for 1,600 shares. A market order means the trader is willing to buy at the current market prices.
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The top of the buy order book is $49.520 with a quantity of 4025 shares. However, since the trader is buying, we need to look at the sell order book.
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The top of the sell order book is $49.600 with a quantity of 1562 shares. The trader will buy all these shares at this price because it's the lowest available sell price.
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After buying the 1562 shares at $49.600, the trader still needs to buy 1,600 - 1,562 = 38 shares.
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The next price in the sell order book is $49.650 with a quantity of 300 shares. The trader will buy the remaining 38 shares at this price.
Solution 3
The trader will buy 38 XYZ shares at $49.650.
Here's the step-by-step explanation:
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The trader places a buy market order for 1,600 shares. A market order is an order to buy or sell a stock immediately at the best available current price.
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The best available current price for selling (from the seller's perspective) is at the top of the SELL order book, which is $49.600 with a quantity of 1562 shares.
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The trader's order is filled first with these 1562 shares at $49.600.
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This leaves the trader with a remaining order for 1,600 - 1,562 = 38 shares.
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The next best available price is $49.650 with a quantity of 300 shares.
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The trader's remaining order of 38 shares is filled at this price of $49.650.
So, the trader will buy 38 shares at $49.650.
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