Order Types & Trade Execution Flashcards
7 cards from real Day Trading practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Order Types & Trade Execution flashcards as text
How does a stop-limit order differ from a regular stop-loss order?
Answer: After the stop price is triggered, a stop-limit places a limit order instead of a market order
Once the stop price is reached, a stop-limit order places a limit order rather than a market order, giving price control but risking non-execution if the market moves past the limit price quickly.
Level 2 quotes provide day traders with:
Answer: The full order book showing bids and asks at multiple price levels
Level 2 data shows all outstanding bids and asks at various price levels from multiple market participants, giving traders visibility into supply and demand depth beyond just the best bid/ask.
A 'Fill or Kill' (FOK) order means:
Answer: The entire order quantity must be filled immediately or the order is canceled entirely
A FOK order requires the entire quantity to be filled immediately and in full; if this cannot be done instantly, the entire order is canceled with no partial fills accepted.
The 'ask' price in a stock quote represents:
Answer: The lowest price a seller is currently willing to accept
The ask (or offer) price is the minimum price at which a seller is willing to sell shares; it is always higher than the bid price, and the difference is the bid-ask spread.
A trailing stop order differs from a fixed stop-loss in that it:
Answer: Automatically adjusts its trigger price as the stock moves in your favor
A trailing stop dynamically adjusts its trigger price as the stock moves in the profitable direction by a set dollar amount or percentage, locking in gains while providing downside protection.
The 'GTC' time-in-force designation stands for:
Answer: 'Good Till Canceled,' meaning the order remains active until manually canceled
Good Till Canceled (GTC) orders remain active until the trader manually cancels them, though most brokers impose a maximum duration (typically 60–90 calendar days).
Direct Access Trading (DAT) allows day traders to:
Answer: Route orders directly to specific exchanges or ECNs for faster and more precise execution
Direct Access Trading routes orders straight to specific market destinations such as exchanges, ECNs, or market makers, bypassing traditional order handling for superior speed and execution control.