Day Trading Order Types & Trade Execution 2

Question 1

How does a stop-limit order differ from a regular stop-loss order?

Accepted Answer

After the stop price is triggered, a stop-limit places a limit order instead of a market order

Answer

A stop-limit order does not require a stop trigger price

Answer

A stop-limit order executes immediately at the current market price

Answer

Stop-limit orders can only be used for buying, not for selling

Question 2

Level 2 quotes provide day traders with:

Accepted Answer

The full order book showing bids and asks at multiple price levels

Answer

Real-time news headlines and press releases about their holdings

Answer

Historical price data and charting for technical analysis

Answer

Analyst ratings and broker buy/sell recommendations

Question 3

A 'Fill or Kill' (FOK) order means:

Accepted Answer

The entire order quantity must be filled immediately or the order is canceled entirely

Answer

The order must be filled in multiple partial transactions over time

Answer

The order remains active until it is completely filled regardless of how long it takes

Answer

Only half the order quantity needs to fill before the rest is canceled

Question 4

The 'ask' price in a stock quote represents:

Accepted Answer

The lowest price a seller is currently willing to accept

Answer

The price a buyer is currently willing to pay for shares

Answer

The most recently executed transaction price in the market

Answer

The average price over the past five trading minutes

Question 5

A trailing stop order differs from a fixed stop-loss in that it:

Accepted Answer

Automatically adjusts its trigger price as the stock moves in your favor

Answer

Only functions during pre-market and after-hours trading sessions

Answer

Requires the trader to manually update the stop price each trading day

Answer

Triggers at a fixed percentage below only the opening price of the day

Question 6

The 'GTC' time-in-force designation stands for:

Accepted Answer

'Good Till Canceled,' meaning the order remains active until manually canceled

Answer

'Get The Cash,' meaning an order to liquidate the position immediately

Answer

'General Trading Committee,' a regulatory classification for orders

Answer

'Go To Close,' meaning the order executes at the end of the session

Question 7

Direct Access Trading (DAT) allows day traders to:

Accepted Answer

Route orders directly to specific exchanges or ECNs for faster and more precise execution

Answer

Trade directly with other retail investors without any broker involvement

Answer

Access non-public company information through licensed broker platforms

Answer

Execute trades exclusively during extended after-hours sessions