Final answer:
A good-till-cancelled limit sell order may never get executed if a buyer isn't willing to meet the specified sell price, posing the primary risk compared to a market order. Option A is the correct answer.
Step-by-step explanation:
Opting for a good-till-cancelled limit sell order over a market order introduces a primary risk centered on the potential non-execution of the order. This order type, defining the minimum price at which a security is to be sold, possesses an enduring quality as it remains active until either successfully completed or manually revoked. Unlike market orders, which swiftly execute at prevailing market prices, the good-till-cancelled limit sell order lacks the assurance of immediate fulfillment.
The inherent risk arises from the contingent nature of finding a matching buyer willing to meet the specified price. This risk becomes particularly pronounced when the designated selling price deviates significantly from prevailing market conditions. In such cases, the order may linger indefinitely without execution, exposing the seller to the volatility of market fluctuations.
While the good-till-cancelled limit sell order provides a level of control by stipulating the desired minimum price, the absence of a guarantee for execution necessitates vigilance. Traders must carefully assess the current market environment, ensuring that the specified selling price aligns sensibly with prevailing conditions to enhance the likelihood of order fulfillment. This strategic consideration underscores the nuanced decision-making involved in selecting order types, emphasizing the importance of balancing desired pricing with the potential trade-off of order execution certainty.