Day Trading Order Types & Trade Execution 3

Question 1

A bracket order in day trading consists of:

Accepted Answer

Three orders: an entry order plus a profit-target limit and a stop-loss order

Answer

Two orders: a limit entry order paired with a single market exit

Answer

A pair of identical limit orders placed symmetrically for hedging purposes

Answer

Four orders combining buy and sell limits at equal distances from the entry

Question 2

An 'Immediate or Cancel' (IOC) order:

Accepted Answer

Allows partial fills and automatically cancels any unfilled portion right away

Answer

Must be filled entirely or the whole order is immediately canceled

Answer

Remains active until the close of the regular trading session

Answer

Is only available for futures and options contracts, not equities

Question 3

Order routing in day trading refers to:

Accepted Answer

The process of directing an order to a specific exchange, ECN, or market maker for execution

Answer

The physical delivery of printed trade confirmations to the trader's address

Answer

The algorithm that determines trade entry timing based on technical price signals

Answer

The broker's internal method of calculating and applying commissions to each trade

Question 4

The bid-ask spread in a stock quote represents:

Accepted Answer

The difference between the highest buyer's price and the lowest seller's price

Answer

The total broker commission charged on each completed transaction

Answer

The stock's daily price range measured from the open to the close

Answer

The margin collateral required to hold a leveraged position overnight

Question 5

When a day trader executes a short sell order, they are:

Accepted Answer

Borrowing shares to sell now with the intent to repurchase them at a lower price

Answer

Selling shares they own at a discounted price to attract buyers quickly

Answer

Placing a limit sell order at a price below the current market price

Answer

Reducing an existing long position by selling a portion of held shares

Question 6

A Market-on-Close (MOC) order executes:

Accepted Answer

At the official closing price at the end of the current trading day

Answer

At the opening price of the following trading session the next morning

Answer

When the stock reaches its lowest intraday price during the session

Answer

Automatically after the midday slowdown period around 1:00 PM ET

Question 7

Price improvement in order execution occurs when:

Accepted Answer

An order fills at a better price than the quoted bid or ask at the time of submission

Answer

A trader manually revises their limit price to a better level after submitting

Answer

A broker reduces their commission fee below the initially advertised rate

Answer

Market volatility decreases significantly after the order has been placed